Daily Archives: April 9, 2009

Poster child of the NRA

Gun sales surge after Obama election



Filed under Uncategorized

We are not alone

The U.S. Congress isn’t the only legislative body who knows how to waste money. These guys are friggin’ loony!

From the Toronto Sun:

Banning disposable coffee cups, at least in their current paper and plastic form, is still on the table at City Hall, though councillors won’t be debating it for a few months.

The city’s public works committee was supposed to address the issue yesterday, but the controversial plan has been delayed until June so that city staff and industry representatives can try to find other, less explosive solutions.

Meanwhile, Toronto residents continue to send about 350 million cups and lids to the city’s landfill because neither the paper cups nor the plastic lids are currently accepted in the city’s blue bin program.

“If you’re anywhere in the City of Toronto, the cup and lid go in the garbage,” said Geoff Rathbone, the city’s solid waste director.

“The only exception to that would be private stores.”

First proposed in December, along with a controversial plan to force retailers to charge 5 cents per plastic bag, intense lobbying forced the city to back down from their coffee cup stance.


Instead, they formed a 40-person working group, which has spent at least $50,000 on consultants to address the issue, either to use different materials in the disposable cups or find a recycling company to buy them.

NYC commuters can only pray that Mayor Mike doesn’t hear of this idea.

1 Comment

Filed under Uncategorized

The pension mess persists

Joe Wiesenthal and Megan McArdle say, we’re in trouble. Yes we are.

Megan McArdle:

This is not, it should be emphasized, exclusively a problem of public sector pensions; private firms are also underfunded.   But the scale is vastly different.  According to the Pension Benefit Guaranty Corporation, which regulates and insures pensions, the total deficit in private plans covering about 34 million workers was a little over 10 billion as of September 2008.  That’s almost certainly multiplied quite a bit since then.  But the current underfunding in public plans, which cover about 22 million workers, seems to be something north of a trillion dollars.  And they’re not insured.

The funds that are responsible are a different sort of headache; they’ll be slapping heavy levies on local school districts and governments to shore up their capital.  That will be a nasty burden on strapped local governments, particularly in places that are already in decline.  My mother’s hometown in Western New York now sees its local fiscal picture vary heavily with the financial industry 350 miles away because of teacher pensions.

1 Comment

Filed under Uncategorized

Ethanol – $4 billion boondoggle

I bet that $4 billion is understating the case.

From what we’re reading in a report released by the Congressional Budget Office, ethanol can’t become profitable on its own, it barely reduces our use of foreign oil, its benefit to the environment is questionable and its cost to the government is massive–$4 billion to be precise.

In the report the CBO says that increased use of the ethanol between April 2007 and 2008, accounted for 10 to 15 percent of the rise in food prices during that same period. The 10-15% increase in food prices attributed to ethanol means that federal spending on the Supplemental Nutrition Assisteance Program and child nutrition programs went up by $600 to $900 million.

Also in the report, the CBO says firms that blend ethanol with gasoline receive a tax credit of 45 cents per gallon. The cost of that credit in forgone tax revenue was $3 billion in 2007. If that remains steady for this year, it means that the total bill for ethanol production could be $3.9 billion. Factor in an increase in $75 million to the WIC (another government food program) and you’re basically at $4 billion for ethanol.

For all that spending, the benefits appear to be minimal. As far as reducing greenhouse gas emissions is concerned, the Argonne National Labratory says it only reduces them by 20% in the short term on average compared to gasoline. In the long run it becomes less clear, because increasing the amount of land used to farm corn means that there are fewer trees around to absorb carbon.

1 Comment

Filed under Uncategorized

Will home prices recover? Maybe not

Here’s an interesting discussion by John Carney on Clusterstock about that possibility. 

We have become accustomed to think of falling home values as a sign of a city’s slow death. (Think Detroit.) We think of cities and suburbs that remain vibrant as being immune from that kind of drop. The common assumption is that eventually, after a downturn, prices will swing back. But, in fact, the long-term data we have is very inconclusive. The centurylong view shows us exactly two periods of marked increase, and none of decline. But an even longer view does show a decline in the early years of the 20th century.

If home prices merely stop falling right now, then the price advance of the 1990s would still represent a dramatic jump from historical values of the sort that that we have seen only once before (in the 1940s). The home-price optimists, like the National Association of Realtors, persist in the idea that prices will “return” to the peaks of 2006. But there is no reason at all to think that they have to. They may return to where they stood in the late ’90s (which would mean that they still have a further to fall) or to some point in between. It’s even imaginable that the housing market could stagnate long enough to reverse some of the historic advance of the early postwar years.

Is this long-term downturn likely? Frankly, we don’t think anyone can tell you with any certainty. We’re engaged in an almost unprecedented social experiment with how people react to falling asset values. Will the generation that watched housing boom and bust conclude that housing has become cheap enough to finally start bidding it up again? Or will they be so scarred by the damage inflicted on our economy and individual lives that they’ll rent, buy cheap and avoid as much debt as possible?

We’re hoping he’s Gimein isn’t right. The confidence that came with ownership of appreciating homes no doubt helped create some of our past prosperity. There may actually be positive externalities to homeownership, although skeptics have a good argument that those are outweighed by the costs of increasing ownership. It would be a shame if this was gone for good.


Filed under Uncategorized

Where’s Walt(o) to defend this guy as engaging in “mere puffery”?

Jersey man, Wayne Puff, pleads guilty to running real estate Ponzi scheme.

April 9 (Bloomberg) — The founder of NJ Affordable Homes Corp., a purported New Jersey real estate investment business, pleaded guilty to defrauding mortgage lenders and hundreds of investors of more than $80 million through a Ponzi scheme.

Wayne Puff, 61, admitted today in federal court in Newark, New Jersey, that he conspired from 1998 to 2005 to get $120 million from investors by falsely touting the company’s profits and relying on phony mortgage documents, according to court papers.

Puff, who promised investors annual returns as high as 22 percent, defrauded lenders including Washington Mutual Inc., Greenpoint Mortgage Funding Inc. andCredit Suisse Group AG, court papers show. Puff admitted using investor money to pay for trips to the Cayman Islands, credit-card expenses, restaurant meals, and investor lawsuit settlements, records show.

“Puff was a con man who perfected the art of mortgage and real estate fraud and fashioned it into a classic Ponzi scheme,” acting U.S. Attorney Ralph Marra Jr. said in a statement. “He hatched his scheme amid lax controls in the mortgage market to commit a huge fraud.”

Puff, who admitted conspiracy to commit wire fraud, faces as many as 20 years in prison. 

“He’s extremely remorseful,” Thomas Moran, a lawyer for Puff, said in an interview.

In my experience, they usually are. But really, entrusting money to a man named “Puff”?

Comments Off on Where’s Walt(o) to defend this guy as engaging in “mere puffery”?

Filed under Uncategorized

The 70% solution

34 Byfield Lane

34 Byfield Lane

Regular readers of this blog will know that I’ve been playing around with a new pricing metric, using the assessed value of a property (as calculated by the town in its 2005 reevaluation)as a guide stick for where prices are today. To remind you, the assessed value is 70% of the market value (no, I don’t know why – if you do, please write) so we’re taking a 30% discount from property values of 2005. This seems to be working on a lot of cases, and doesn’t on others, so try it or not. But I was interested to see that Agent Amanda Miller has dropped the price of this listing from $3.350 million to $2.750 which, as she notes, is below its assessed value of $2.833 million. I’ll be curious to see where it sells. But a smart pricing decision, I think, bearing in mind the old saw that the mark of genius is the extent a person agrees with you.

Comments Off on The 70% solution

Filed under Uncategorized

There’s a buyer for every house, eventually

41 Birchwood

41 Birchwood

This is a very nicely-built house but the yard, to my eye, seemed to be mostly swamp, so I wasn’t surprised that it sat at $5.995 million, unsold. Nevertheless, the builder held her ground, a buyer finally did show up  and closed on it today for $5.2 million.


Further good news for sellers, 75 Dandy Drive, an older house on an acre of land, is reported as pending today. I dismissed this house from further consideration when it first appeared asking $1.795 but the seller dropped its asking price to $1.395 at some point thereafter and a buyer showed up. Interesting contrast here: 7 Dandy, beautiful new construction but with much less land, sold just last week for $1.850 million. If this one goes for close to $1.395, I guess that’s evidence that someone really, really wants a big back yard.


Filed under Uncategorized

Contracts this year

A total of fifty units, single family, co-op and condo have gone to contract this year. Some have sold, some are still in contract so we don’t know final sales prices for all fifty, but on the reasonable assumption that not much has gone for more than its asking price since January, we can tell the following: Nothing has broken the $6.950 million barrier.

(So get this, sports fans: we have sold no – zero – houses at $6.950 or more this year. How many houses are currently for sale at that price or above? The answer is, 97).

So what has sold?

11 Co-ops and condos, ranging from really, really cheap to the astonishing price of $2.3 million on Valley Road. I wonder who wants to be one of two owners in that complex, and what his agent told him to instill such bravery? Never mind, let’s look at single families:

$6-$7 million:  3

$5-$6 million:  2

$4-$5 million:  0

$3-$4 million: 6

$2-$3 million: 5

$1-$2 million: 13

$900 -$1 million: 2

$800-$900,000:  2

$700,000-$800,000: 1

$600,000-$700,000: 3

$400,000-$500,000: 2

1 Comment

Filed under Uncategorized

Fifty per cent off still moves houses, even in this market

18 Sandy Lane

18 Sandy Lane

This house on four acres off Porchuck but adjacent to the Merritt tried the market at $2.995 back in May, 2007, but didn’t sell. It’s stayed up for sale for two years, going through several brokers and a long series of price reductions until, at $1.895, it found a buyer a month ago. That deal fell through at the last minute, so they switched brokers again and cut the price to $1.495. Nine days later, it’s reported as under contract again. If this one sticks, someone will have a good deal, I think. I wasn’t wild about the place at $3 million so you can’t really say it’s lost half its value – can’t lose what you don’t have – but $1.495 or less for this much house in the Round Hill neighborhood looks good.


Filed under Uncategorized

12 Step program for Sellers

I was thinking about sellers and their current existence in the state of denial and thought that a program of recovery might help them overcome their blindness. Maybe not, but it’s a slow morning before heading out for open house tour, so here we go:

1. We admitted that we were powerless over the market and that the marketplace is unmanageable.

2. Came to believe that market forces are greater than ourselves and could restore prices to sanity.

3. Made a decision to turn our house and our will over to the care of the marketplace.

4. Made a searching and fearless inventory of all previous rejected offers for our house and vowed never again to ignore angels sent from Heaven .

5. Admitted to ourselves, our agent and to another person that our opinion of our house’s value was demented.

6. Were entirely ready to have market forces remove our delusions and our dreams of price appreciation of 10% per year, compounded, for each year of our ownership.

7. Humbly asked the marketplace to send a buyer our way and vowed not to be stupid when it did.

8. Made a list of all the opportunity costs we had incurred by refusing to let go of our denial.

9. Made direct amends to our family for our previous foolishness,  accepted an offer on our house and took them to Disneyland.

10. Made a nightly inventory of our errors and promptly admitted when our fear and denial caused us to insult and drive away buyers.

11. Continued to seek constant contact with the marketplace and our agent, asking only for knowledge of that market and our place within it.

12. Having had an awakening from our slumber we sold our house and got on with our lives.


Filed under Uncategorized

I’ve changed my mind – let’s bring back “For Sale” signs

Withe exception of a brief period in the 80s Greenwich has never used “For Sale” signs to market its houses and, after Rene Anselmo took after those who tried using them during that dark period three decades (!) ago we’ve banned them. I have always thought this was a good thing that kept the town looking pretty, but I had occasion this morning to check up on how many houses are for sale on a certain street and was struck with an idea: if sellers physically saw how many houses on their street were competing with theirs, they might get religion. Or not – the power of denial is one of the strongest influences on human behavior, but here’s a tally of whats available on just a few of our better streets. I think if there were realtor signs flapping in the breeze as would-be sellers made their way home, it might have a salutary effect.

Lake Avenue: 13

North Street: 20

Round Hill: 18

Stanwich: 17

Add in signs for rentals and we’d look like yard sale heaven.


Filed under Uncategorized

But will they accept offers 25% less than it’s “worth”?

NYC co-op sales collapse. We’ve been reporting on this for months but for the benefit of those Greenwich residents who don’t believe something’s happening if it isn’t reported in The New York Times, feast your eyes.

Apartment prices have once more become the talk of the town in Manhattan, but this time the talk is of uncertainty and falling numbers. While brokers say they are seeing more activity lately, especially from first-time buyers taking advantage of lower interest rates, housing analysts are predicting a prolonged slump in prices and sales that could last as long as four or five years.

In this year’s first quarter, sales of co-ops and condominiums in Manhattan plunged nearly 60 percent from the first quarter of 2008. Average co-op prices fell as much as 24 percent in the same period, according to various market reports released last week.

Condo prices have held up so far, but only because buyers who went into contract long before the downturn were closing on newly completed condominium buildings. But now few new contracts are being signed on unfinished condominiums, and some buyers have been renegotiating contracts or are trying to back out of them. Co-ops and condos make up 98 percent of the residential properties for sale in Manhattan.

The stress is most severe at the high end of the market. There are 350 apartments and town houses for sale in Manhattan with asking prices of more than $10 million, and inventory has been growing. It would take about six years at the current sales rate to absorb all those listings.

“For the last three years, it was the bigger the better,” said Dolly Lenz, a broker at Prudential Douglas Elliman. “Now the key words are smaller, livable and affordable. Before no one asked what the maintenance was. Now everyone wants to know.”

Manhattan was spared some of the housing problems the rest of the country faced during this downturn. The mortgage foreclosure rate in Manhattan remains low even today. While thousands of condos were built here, most were bought by homeowners, not speculators, as was common in Miami and other oversaturated markets.

But Manhattan housing prices were driven higher by record earnings and bonuses on Wall Street, and they fell hard when the music stopped last fall.


Filed under Uncategorized