The new Vanity Fair article on FGG and the Noels quotes an observer:
[A] well-known investor says, “These [F.G.G.] guys were just a marketing machine.… Walter was just really a customers’ man.… They didn’t even know what questions to ask. It’s malpractice. It’s gross negligence. It’s not criminal behavior, in my view. Nobody would do this. I mean, Walter wouldn’t ruin himself. Nobody would do this.… You can’t put amateurs in a world of grownups.… That’s really what this is. They are amateurs.”
The term “customers’ man” is rarely used these days for clueless stock brokers but my father (Yale 27 ; was that your class, Walt?) used to tell the tale of two former college classmates who encounter one another on the street. One asks the other how he’s earning a living and is told, “Oh, I’m a customers’ man, but please don’t tell my dear sweet Mama – she still thinks I’m a piano player in a whore house”. Tee hee.
California’s broke and can’t print money so spending cuts are on the way. One can quibble over some of them: closing 80% of the state’s parks doesn’t seem designed to save money so much as to inconvenience as many people as possible, but if the budget crisis accomplishes nothing else, it’s done this: forced a politician to tell the truth:
“Government doesn’t provide services to rich people,” Mike Genest, the state’s finance director, said on a conference call with reporters on Friday. “It doesn’t even really provide services to the middle class.” He added: “You have to cut where the money is.”
Our country’s been playing at class warfare for almost 100 years but for most of that time the middle class was suckered into believing that they were on the side of the poor and against “the rich”. In California, they’ve discovered the reality of the situation and have rebelled. It will be interesting to see what happens when that realization emerges in other states, too.
That question has automakers and the new owner of General Motors deeply worried,according to the NYT. Will there be pent-up demand once the recession ends or have Americans lost their taste for cars?
My money is on the latter – too bad my tax money is already bet on the former. The new CAFE standards and adoption of California’s air pollution controls will dictate tiny, expensive and underpowered cars in the future. That’s dull and boring and hardly likely to convince someone to go into debt to purchase one. I’m undecided whether to hang on to my 2003 Honda or buy a new one in a year or two before the new standards hit but I’m leaning toward buying one last normal car and hoping it lasts until my grandchildren take my keys away from me.
Yesterday I mentioned that 11 Quail Road, on the market since May, 2008, had dropped $2 million off its original asking price of $8.875 million. I wrote that it had been a 2004 spec house (built on land purchased for $2.9 million in 2002 – those were the days) that sold that year for $6.450 million. A reader corrected me and said that in fact it had been “bought” by its builder. The reader was exactly right.
The original owner in 2004 is listed as “Inwood Management” and the owner today as “Ernest Bello”. Googling the two together, we learn that they are one and the same. There’s nothing nefarious about this, but it does mean that we have no idea what the market price for the property was back then in 2004. Its 2004 value is pretty much irrelevant these days but nonetheless, let the buyer beware.
I suppose that since he was kicked out of Round Hill Club and is no longer welcome at the bar, Walt Noel’s stuck across the street in his cottage, prowling the internet for stories about himself But aren’t we glad he is, because he just alerted me that Vanity Fair, still trying to overcome its “Golden in Greenwich” 2002 profile of the Noel family, is out with an updated version. It’s not as complimentary.
I thought Original Walt was directing me to a parody site when he sent me this link, but it’s true:Fairfield Greenwich Group is suing Fairfield Sentry (or the other way around – who cares?) for failing to detect Madoff’s scam.
[the Johnsons load their guns and point them at Bart. Bart then points his own pistol at his head]
Bart: [low voice] Hold it! Next man makes a move, the nigger gets it!
Olson Johnson: Hold it, men. He’s not bluffing.
Dr. Sam Johnson: Listen to him, men. He’s just crazy enough to do it!
Bart: [low voice] Drop it! Or I swear I’ll blow this nigger’s head all over this town!
Bart: [high-pitched voice] Oh, lo’dy, lo’d, he’s desp’it! Do what he say, do what he say!
[Townspeople drop their guns. Bart jams the gun into his neck and drags himself through the crowd towards the station]
Harriet Johnson: Isn’t anybody going to help that poor man?
Dr. Sam Johnson: Hush, Harriet! That’s a sure way to get him killed!
Bart: [high-pitched voice] Oooh! He’p me, he’p me! Somebody he’p me! He’p me! He’p me! He’p me!
Bart: [low voice] Shut up!
[Bart places his hand over his own mouth, then drags himself through the door into his office]
Bart: Ooh, baby, you are so talented!
[looks into the camera]
Bart: And they are so *dumb*!
Or so some London real estate “experts” say. Prices for luxury homes off only 20% from this time last year which, believe it or not, is a good sign.
The average value of houses and apartments costing more than 1 million pounds ($1.6 million) in the most expensive neighborhoods gained 1.6 percent from April, the London-based property broker said in a statement today.
Prime residential properties have lost value on an annual basis for 11 straight quarters and won’t recover until the second quarter of 2010, according to Knight Frank. Prices will probably fall by a total of 30 percent from the market’s peak in March 2008, the broker estimates.
“We are approaching the back end of the price declines,” said Liam Bailey, Knight Frank’s head of residential research, by telephone. Property values won’t return to the levels reached last year until 2014 at the earliest, he said.
Here in Greenwich, while it may be true that the prices of houses actually selling are approaching the bottom, the price of our unsold inventory still has a long way to fall.