Daily Archives: May 27, 2009

If this is true, won’t Fred Bourke be cheesed?

Bill Clinton involved in illegal uranium deal, bribery of foreign officials. After all, the only difference in what the two men are alleged to have done is that Mr. Bourke never served as President of the United States. Here’s BusinessInsider’s story, based in part on reporting by The New York Times:

Late on Sept. 6, 2005, a private plane carrying the Canadian mining financier Frank Giustra touched down in Almaty, a ruggedly picturesque city in southeast Kazakhstan. Several hundred miles to the west a fortune awaited: highly coveted deposits of uranium that could fuel nuclear reactors around the world. And Mr. Giustra was in hot pursuit of an exclusive deal to tap them.

Unlike more established competitors, Mr. Giustra was a newcomer to uranium mining in Kazakhstan, a former Soviet republic. But what his fledgling company lacked in experience, it made up for in connections. Accompanying Mr. Giustra on his luxuriously appointed MD-87 jet that day was a former president of the United States, Bill Clinton….

Within two days, corporate records show that Mr. Giustra also came up a winner when his company signed preliminary agreements giving it the right to buy into three uranium projects controlled by Kazakhstan’s state-owned uranium agency, Kazatomprom.

The monster deal stunned the mining industry, turning an unknown shell company into one of the world’s largest uranium producers in a transaction ultimately worth tens of millions of dollars to Mr. Giustra, analysts said.

Just months after the Kazakh pact was finalized, Mr. Clinton’s charitable foundation received its own windfall: a $31.3 million donation from Mr. Giustra that had remained a secret until he acknowledged it last month.

So… The former President takes an unknown mining executive to Kazakhstan, the guy gets a huge deal, and then just a few months later donates $31.3 million to the Clinton foundation. Maybe that’s not so bad. After all, if the former President (who is a private citizen — although his wife is secretary of state) helped hook us up on a sweet uranium mining deal, we’d probably show him several million worth of gratitude too.

But if the deal was illegal — not just based on Clinton’s connections, but on actually breaking the laws of Kazakhstan — then it’s another story for both Clinton and Mr. Giustra (and now, by extension, publicly traded Uranium One).  Especially if the guy who sold the mines did so because he was hoping to get some political favors in return.

Uranium One says it has did nothing wrong and that UrAsia payed full value for its stake.  But perhaps Kazatomprom and its CEO Dzhakishev — who sold UrAsia the stake — had another angle.

Back to the NYT:

In February 2007, a company called Uranium One agreed to pay $3.1 billion to acquire UrAsia. Mr. Giustra, a director and major shareholder in UrAsia, would be paid $7.05 per share for a company that just two years earlier was trading at 10 cents per share.

That same month, Mr. Dzhakishev, the Kazatomprom chief [who sold Giustra the mining assets two years earlier], said he traveled to Chappaqua, N.Y., to meet with Mr. Clinton at his home. Mr. Dzhakishev said Mr. Giustra arranged the three-hour meeting. Mr. Dzhakishev said he wanted to discuss Kazakhstan’s intention — not publicly known at the time — to buy a 10 percent stake in Westinghouse, a United States supplier of nuclear technology.

Nearly a year earlier, Mr. Clinton had advised Dubai on how to handle the political furor after one of that nation’s companies attempted to take over several American ports. Mrs. Clinton was among those on Capitol Hill who raised the national security concerns that helped kill the deal.

Mr. Dzhakishev said he was worried the proposed Westinghouse investment could face similar objections. Mr. Clinton told him that he would not lobby for him, but Mr. Dzhakishev came away pleased by the chance to promote his nation’s proposal to a former president.

Mr. Clinton “said this was very important for America,” said Mr. Dzhakishev, who added that Mr. Giustra was present at Mr. Clinton’s home.

Both Mr. Clinton and Mr. Giustra at first denied that any such meeting occurred. Mr. Giustra also denied ever arranging for Kazakh officials to meet with Mr. Clinton. Wednesday, after The Times told them that others said a meeting, in Mr. Clinton’s home, had in fact taken place, both men acknowledged it.

Ah, denying a meeting took place and then “remembering” it. That’s not suspicious or anything.

It’s hard to see how this story doesn’t hook both Bill Clinton and Hillary if it doesn’t just go away quickly.

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Obama Debt

Instapundit has posted this chart a number of times but since it never seems to make it to the pages of the New York Times and our president keeps claiming that he’s only spending because that ol’ Debbil’ Bush made him do it, I thought I’d put it out here. It makes me feel better, anyway.

obamadebt

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Pequot Capital shuts down amid investigation

Too bad. If anyone was guilty of insider trading, as alleged, I’m sure it wasn’t the founder. But there they go anyway, according to the WSJ. I feel a certain sympathy for the commercial broker who just booked them into 26,000 feet up at 187 Danbury Road in Wilton. Never count your commissions until the check’s been cashed – these days, more true than ever.

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One sale, no contracts today

15 Maher Ave

15 Maher Ave

15 Maher Avenue sold for $2,509,500 today, down from its asking price of $2.850 but not bad, considering that they paid just $2.675 for it in 2007. That’s almost a break-even; testament to Maher Avenue’s continuing appeal. The tax card shows a 70% value of $1.4 million but I suspect the assessment never caught up with the renovations that were performed here.  The new owner probably won’t be so lucky.

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Stephen Dent avoids jail, sex partners not so lucky

Riverside patron of the nocturnal arts Stephen “Dido” Dent sent his attorney to court today to watch a husband wife extortion team get sentenced: 18 months for him, probation for her. That’s all fun, but I was intrigued by the Greenwich Time’s use of language in an earlier story on poor Dido’s misfortunes when it said:

The Jessops were arrested when they came to Greenwich allegedly attempting to extract more money from Stephen Dent, a wealthy Riverside investor and DuPont heir who has been an extortion victim three times as the result of relationships formed through the alternative datingWeb site SeekingArrangement.com. Dent would pay women he met through the site upward of $200,000 for their online companionship and sometimes for sex at a local hotel until the woman or their associates threatened to expose him, according to police reports. [emphasis added]

I understand that a taxi cab or a commuter train can be referred to as “alternative transportation”, but when did prostitution become an alternative form of dating? Is this part of the whole “alternative lifestyle” pc lingo where any relationship, animal, vegetable or mineral, is equally appropriate and free from moral judgement? The idea has promise because we can use it to solve lots of contemporary problems. We would no longer have to worry about the homeless, for instance, if they’re merely campers enjoying an “alternative housing arrangement”. Iran is proposing “an alternative Middle Eastern map”, and the coming Zimbabwe-style inflation is just a “deflation alternative”. Don’t worry, be happy!

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More money for the bank, less for the seller

As reader Polly points out, the Treasury 10 year is “exploding” (to use her term) today, with mortgage rates climbing right up after them. Those of us who predict huge inflation also predict higher mortgage rates and, at least up to the $8 – $10 million level, where mortgages usually don’t come into play, it’s a pretty simple formula because the average buyer’s housing budget is a fixed-size pie. If banks demand a larger slice, the seller’s slice gets smaller. It has to. Something to consider while you sit in your unsold house, waiting for the market to recover. Of course, it’s also something for buyers to think about, too.

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Start warming up the next crisis

Sanity about global warming is creeping in. In France, Sarkozy wants to appoint a warming-skeptic to head up the ministry of industry and innovation.  Closer to home, the creators of Beavis and Butt-head hit the airwaves tonight with a new cartoon series skewing earnest do-gooder recyclers and the New York Times wonders whether the green bubble has burst. I had figured on that bubble bursting next year, when incandescent light bulbs will disappear, leaving homeowners frustrated and furious but apparently the schedule has accelerated thanks to our recession. Nice to know that hard times are good for something, but the new question is now, “What Will Al Do?” I don’t really care, just so long as he shuts up.

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Those who forget history

There’s a property I’ve been keeping my eye on for a client and its pricing history is illuminating. Originally priced at $5.3 million in 2004 it lingered three years on the market before selling for $3.3 million. The new owners, presumably thinking they’d landed a real bargain, put it back up for sale four months later for, you guessed it, $5.3 million. Now, two years later, they too are back down to the $3.3 million range but alas, this is the 2009 market, not 2007. Maybe in the dead of summer, we’ll see if they’re ready to sell.

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Homer Audubon nods

In replying to a reader’s comments regarding the relative merits of tidal waterfront I mentioned the fun of watching ibexes in the mud. That would indeed be entertaining, what with their hooves getting stuck in the mud and all, but the only ibex I’ve ever seen was in Switzerland, just outside of Gimmelweld. A ibex looks like this:

Not a bird

Not a bird

 An ibis, on the other hand, looks more like this:

Not a goat

Not a goat

And on reflection, what we usually see are these:
I egret to inform you, I erred

I egret to inform you, I erred

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Take that, you stubborn buyer!

One Charter Oak Lane, a new house on the I-95 side of Byram Shore Road, dropped its price from $3.2 million to $2.765 a week ago, apparently without eliciting a favorable response. So okay, you asked for it, today they’ve raised it $30,000, to $2.795. If that don’t learn you, they’ll probably raise it another $7,500.

Why would they do this, you ask? You tell me why the builder chose this spot to build and try to sell a $3.2 million house and maybe I can answer your question.,

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Down, down, down

23 Egglestone Lane is a nice, smallish and dated (1918?) house with direct waterfront on Old Greenwich Harbor. It sold for $3.1 million back in 2001, when that was considered a fair bit of change, and was listed again in 2008 for $8.5 million. Had a buyer offered 60% of that then, the sellers would no doubt have been insulted but today it’s back, with a new broker, at $5.250 million. Now, before you use this to calculate the drop in market value from last year until today, remember that the property didn’t sell at $8.5 million and never, ever would have. A silly price tag does not provide useful data. When this property does sell, then we can compare it to its last sale and figure it out. My guess is that Old Greenwich waterfront has appreciated since 2001 and still retains some of that appreciation. Not as much as it might have gained by 2007, perhaps, but some.

On the other hand, there’s a home in Cos Cob on 12 Horseshoe drive that was bought for $1.595  $1.745 million in 2005, fixed up a bit and relisted at $1.995 earlier this year. Today’s it’s been marked back down to where it was bought, which sounds like a smart move to me.

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From our Boston reader, the same news

Boston Globe: Housing market’s a bust.

It’s a “tale of two markets,” said Nicolas Retsinas, director of Harvard University’s Joint Center for Housing Studies. One market is dominated by motivated sellers, including banks trying to unload foreclosed properties and distressed homeowners seeking a short sale. Bank-owned sales in Massachusetts made up 8.5 percent of single-family home sales for the first four months of the year. A year ago, sales of foreclosed properties made up 5.3 percent of single-family home sales, according to Warren data. Buyers of these foreclosed homes include investors and first-time buyers who remain priced out of conventional markets.

The other market is the traditional one of buyers and sellers, which is stalled. In this market, again sellers are resistant to cutting prices, Retsinas said, while buyers are reluctant to purchase if they don’t feel the home is at rock-bottom.

“I don’t think first-time buyers and investors alone can restore this housing market,” said Retsinas. “Other buyers and sellers are largely standing on the sidelines.”

Even some historically stable towns are seeing prices drop. Wellesley, for example, had a 53 percent drop in the number of single-family homes sold during the first four months of the year, compared with the same period of 2008, while the median sale price dropped 13.5 percent.

The housing markets in the rest of the country are like Massachusetts: slow. The industry’s most widely followed measurement of activity, the S&P/Case-Shiller national home price index, continued to show record declines. In the first quarter of 2009, home values as measured by the index dropped 19.1 percent compared with the same period last year – the largest decline in more than two decades. 

One of the cofounders of the index, Wellesley College economics professor Karl Case, said the new data paint a bleak picture and have prompted him to reconsider his earlier prediction that the housing market would begin to recover this year.  “I’ve been anxious to see signs of life,” said Case.

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The end of Pixie Dust

My liberal friends simply refused to believe me when I said that they couldn’t magically spend endless amounts of money without finding a way to pay for it. “But it’s all Bush’s fault”, they’d whine, and that was supposed to end the discussion. When it didn’t, they had the ultimate answer: “the Messiah will fix it! He will produce thousands of magical millionaires who we can milk and milk and have a never-ending source of feed. He won’t tax the middle class or the poor, though, because he promised them a tax cut!”

And so they elected the man and have been whooping and cheering his spending plans ever since.

And they probably still will, only now they’ll admit that they are sinners and must pay to Washington what they had wrongfully withheld. Hope and change has arrived, in the form of a national sales tax.

Washington Post:

With budget deficits soaring and President Obama pushing a trillion-dollar-plus expansion of health coverage, some Washington policymakers are taking a fresh look at a money-making idea long considered politically taboo: a national sales tax.

Common around the world, including in Europe, such a tax — called a value-added tax, or VAT — has not been seriously considered in the United States. But advocates say few other options can generate the kind of money the nation will need to avert fiscal calamity.

At a White House conference earlier this year on the government’s budget problems, a roomful of tax experts pleaded with Treasury Secretary Timothy F. Geithner to consider a VAT. A recent flurry of books and papers on the subject is attracting genuine, if furtive, interest in Congress. And last month, after wrestling with the White House over the massive deficits projected under Obama’s policies, the chairman of the Senate Budget Committee declared that a VAT should be part of the debate.

“There is a growing awareness of the need for fundamental tax reform,” Sen. Kent Conrad (D-N.D.) said in an interview. “I think a VAT and a high-end income tax have got to be on the table.”

A VAT is a tax on the transfer of goods and services that ultimately is borne by the consumer. Highly visible, it would increase the cost of just about everything, from a carton of eggs to a visit with a lawyer. It is also hugely regressive, falling heavily on the poor. But VAT advocates say those negatives could be offset by using the proceeds to pay for health care for every American — a tangible benefit that would be highly valuable to low-income families.

“Everybody who understands our long-term budget problems understands we’re going to need a new source of revenue, and a VAT is an obvious candidate,” said Leonard Burman, co-director of the Tax Policy Center, a joint project of the Urban Institute and the Brookings Institution, who testified on Capitol Hill this month about his own VAT plan. “It’s common to the rest of the world, and we don’t have it.”

I’m certainly not going to welcome yet another attack on my diminished income but it will be some kind of relief to at least see liberals’ noses pressed hard against their pile of dreams and forced to acknowledge that they, not fabulous trillionaires, will have to fund them. I can hardly wait for our energy costs to quadruple to pay for our carbon reduction plans – won’t we have fun then!

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California – not an ounce of fat to spare

Business Insider has a report showing some  high paid California municipal workers. Like a nurse earning $350,000, lots more paper pushers at $250,000, etc. Multiply that largess across the state and its no wonder that bureaucrats first (and only) reaction to proposed cuts in spending is to cut out school crossing guards (see Greenwich, Ct., eg) and bedpan – emptiers in nursing homes. ‘Cause otherwise, you know, people might start asking what exactly they’re paying these guys for.

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Hope and change on Boulder Brook Road

Nine Boulder Brook, the best of three spec houses on that street, has cut its price to $5.5 million, 25% less than its original asking price of $7.250. The builder paid $2 million for the land and, what – $2.1 million to build?  (I’m figuring $300 sq.ft. X 7,000)  so he should still be alright here, assuming he sells it now. Funny – last fall, I asked the builder of this house how he could compete with #39, a not-as-nice spec house that had dropped from $8.595 to $4.998. “Quality,” he assured me and I wished him luck because, in Greenwich, quality is appreciated but rarely paid for. Number 39, by the way, has since raisedits price to $5.4998, with no more success than before. The one hold out on Boulder is a Westchester builder who put his effort at # 33 on in February, 2008 for $6.875 and 18 months later has barely budged: he’s still at $6.575.

All in all, Boulder Brook will make a nice case study of the history of the boom, as builders pushed into dubious neighborhoods (by which I mean only that the existing houses aren’t mansions) and built enormous spec houses in th eexpectation that they could change the street to meet their prices. It’s a strategy that might have worked in better times but all three of these guys had the unfortunate timig to finish their houses just as the market collapsed. Oops.

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April sales of existing homes up, but so is inventory

So says the national data released today. In Greenwich, Shore & Country’s invaluable statistics page  shows a current inventory of 765 single family homes, up from 628 in 2008, 560 in 2007 and 531 in 2006. By my (admittedly poor) math, that’s a 44% increase since May 25, 2006. So inventory is up 44%, sales are down even more. Houses that went to contract May 1st – May 27 in 2006 = 65, 2007 = 56, 2008 = 39, 2009 = 27. If inventory is up 44% and sales are down 60%, I wouldn’t think this was the time to break new price records.

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Die trying

9 Dingletown

9 Dingletown

The Wall Street Journal has an opinion piece this morning that looks at the value of investing in a house and concludes that it’s not all it’s cracked up to be. Fair enough, but that doesn’t slow the optimists of Greenwich. Here’s a nice enough house at 9 Dingletown Road, for instance, whose owner is convinced he’s still in the boom market. He paid $4.3 million for it when it was new in 2004, established (by not selling it for what he asked) that it was not worth $5 million in 2005 and 2006, took it off the market in 2006, added a pool and some landscaping and now wants $6.250 million for it.  He might get it, although there are a number of houses nearby, one better, two worse, that aren’t selling, but successful or not, I admire his determination to not let a little negative economic news interfere with his dreams.

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Ah, Chutzpa!

This is great: Banks with bad loans want to sell them to the F.D,I.C. and then buy them back for themselves at a discount. I think this works as follows: Bank P makes a really dumb loan of $5 million to a local builder for a house that will never sell for the projected price of, say, $8 million. The builder goes belly up, the banks stuck with its mistake, so it sells it for as much as it can to us (that wold be you and me, the taxpayer), then buys it back for pennies on the dollar. The bank still has the bad loan, but now it’s on its books for $750,000, it’s pocketed oh, say $3,000,000, and its ready to rock and roll again. Sheer genius at work. There are a few doubters, though we know that they’re just being unpatriotic, so we’ll ignore them:

However, the move by the banks is drawing criticism from some quarters, The Journal noted.

“To allow the government to finance an off-balance-sheet maneuver that claims to shift risk off the parent firm’s books but really doesn’t offload it is highly problematic,” Arthur Levitt, a former Securities and Exchange Commission chairman who is an adviser to private-equity firm Carlyle Group, told The Journal.

The program itself has already raised some eyebrows. In an April DealBook column, Andrew Ross Sorkin argued that the structure of the Public-Private Investment Program indicates that the F.D.I.C is trying to stabilize the system by adding more risk, not less, to the system.

Meanwhile, in earlier this month hedge fund Elliot Management took the program to task, saying that it will lead to “cozy deals, conflicts of interest, massive taxpayer losses and concentrated large profits reaped by a small group of anointed gatekeepers.”

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Attack on Connecticut hedge funds and venture capital passes Senate

They’re on their way – the bill to make Connecticut the first state in the union to regulate hedge funds and private venture money has passed the state Senate and is headed for the House.With the overwhelming Democrat majority in Hartford, passage seems certain. With the understanding that state legislators are dumber than dirt, is there some other reason for this law? I think there is: envy and jealousy. The rest of our fair state has always resented Fairfield County and notwithstanding that the bulk of the taxes used to run the the other counties is extracted from here, has always sought new methods to extract more. The thought of rich, successful people enjoying large houses and expensive cars just drives them nuts and they want to lash out, to show those Greenwich types who’s really in charge, who’s really got the power. And if that drives the money away, well is that too high a price to pay for peace of mind? Not when the mind you’re trying to calm is the size of a small walnut.

Wait until next year, when our deficit balloons to $8 or $9 billion, and the same legislators are faced with cutting union jobs or coming down the highway to Greenwich with truckloads of looters to “claim what’s theirs”. Whoo boy.

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North Korea threatens to attack South

Obama vows to use “all his empathetic powers” to determine the right course of action. U.N. Security Counsel readies a “really, really mean resolution”.  James Earl Carter says he’s tanned, rested and ready to go. World relaxes, knowing it’s in safe hands.

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