Daily Archives: June 20, 2009

How screwed is Ford?

GM and Chrysler not only get free taxpayer money and guaranteed financing for buyers of their cars, it turns out they’re shaking free of the trial lawyers, too by dumping their product liability suits. If I know my trial lawyers, their enthusiasm for chasing uncollectable judgments is no greater than their urge to help a blind man cross the street.  In other words, they’ll dump their suits against these two companies and train their sights on Ford. Seems unfair to me.

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Rank has its privileges

Steve Jobs cuts in line for a new liver while the other Apple founder, Steve Wozniack gets ahead of the crowd to pick up the new iPhone. I can wait for my own new phone and I will until the crowds go away, but if I had to chose, I’ll take the liver. You may skip the bacon, Hannibal.

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Nice work if you can get it

Two thirds of all foreclosure actions in Connecticut are handled by just two firms and our Attorney General wants to know why. Fannie Mae, Freddie Mac and Loan Processing Something or other all direct their business to these firms and the partners, at least, must be raking it in: 1,2000 cases per month and growing. How much are they making? Well, the sheriff they hire to serve these things made $1.1 million last year. No lawyer pays his process server more than he himself is charging, I assure you.

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The downside of the housing bust

It’s difficult to find much sympathy for homeowners who are no longer able to afford $12,000 Viking refrigerators or $30,000 Wolf “professional” stoves (used by the caterers, if at all).But here’s a story in the WSJ about the little town in Misssipsippi where those appliances were made. The folks hurting there are just as real as those up here, but with less margin for loss. My father’s grandfather John Caldwell, who came to this country from Ireland, fought in the Civil War with the Westinghouse brothers and grew wealthy with them as their business partner, used to tell his grandchildren, “remember, children, the poor have their troubles, as well as the rich.” Here’s proof.

(Great Grandfather Caldwell, by the way, was being ironic – it’s a genetic defect in our family)

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Who needs a real estate agent?

Not Jason in Boston. From his description, he’s not getting anything out of the relationship.

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Does Jason really need a Realtor? He wants to be convinced
Email|Link|Comments (18) Posted by Scott Van Voorhis June 19, 2009 09:00 AM

Check out this email I just got from Jason, who is looking for a condo in the South End and Brookline.

It cuts to the core of some of the changes sweeping the real estate industry.

A few years ago, real estate agents had a lot more market power. They had access to the stats and the most pertinent listings. For the average, hapless home buyer – as I was back in 2002 – doing it on your own was not necessarily an attractive option.

But with the explosion of information available on-line – and a profusion of websites offering different insights into the numbers – there has been a democratization of all that information.

Does that mean the real estate agent is doomed? I don’t think so – like journalists and a lot of other folks, they have to reinvent themselves and get smarter about what they do.

Yes, we are awash with information in our society, especially when it comes to real estate.

That makes expertise in evaluating all that data even more valuable.

Alas, Jason, a first-time buyer looking for a condo in the $300,000 to $350,000 range, is stuck dealing with a real estate agent whose ways appear mired in decades past, not in the data driven market of 2009.

Here’s how Jason frames the issue:

“Scott – I think the age old question needs to be brought up in your blog, “why do I need a Realtor”. I am currently looking for a condo in Boston and the only thing my realtor seems to bring the table is getting me in the door to see the place. With the advent of the internet and the MLS, potential buyers now have access to all the listings as any realtor. I figure I could easily find a condo I like and simply hire a lawyer to draw up the paper work for the deal.
What am I missing?”

In a followup email, Jason elaborates further.

“I currently view my Realtor as more of a salesperson than someone there to guide and assist me through what is supposed to be a complex process. I’m constantly the one finding properties on MLS and then I go to her to get me in the door if there isn’t an open house. I can somewhat see the importance of a Realtor during a boom market, but the way things are right now I just can’t justify paying the commission when I’m the one doing the work. “

I guess if I were Jason, I would be questioning as well.

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Parthenon sealed off

Greece has opened what looks like a beautiful museum at the base of the Acropolis. I realize that they had to do something to preserve the place: vicious air pollution and too many tourists were killing it, but I’m glad I was there back in 1972 when a backpacking kid could wander around at will, unhindered by glass walls, officious guards or even, in those days, an excessive number of fellow tourists. But that changed quickly. When I returned to Athens in 1976 I was told that the number of cars in the city had doubled in just those few years. Greece was still under the thumb of Papadopoulos and his fellow colonels in 1972 and the country  (particularly Crete, where I stayed for months) was still very poor and very beautiful. I’m sure things have improved for the Greeks since then but I’m glad I was there before development hit.

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It’s Statistics Saturday!

It’s raining, Tiger Woods is eleven strokes off the lead, so why not sit down and crunch numbers? It’s far more interesting than watching poor Mr. Woods grimace in disgust at his play.

TOTAL NUMBER OF ALL RESIDENCES FOR SALE TODAY (CONDOS/SINGLE FAMILY) 1,001 TOTAL SINGLE FAMILIES: 767

Single families sold this year: 111

SINGLE FAMILIES PRICED $10,000,000 and above, all ages:  47

Sold this year, all ages: 2

Spec homes priced over $10,000,000: 12

Sold this year: 1

SINGLE FAMILIES PRICED BETWEEN $5,000,0000 – $9,999,999, all ages: 114

Sold this year: 12

Spec homes available: 39

Sold this year: 5

So what’s this tell us? Well, of the 111 houses sold so far, 6 1/2 months into the year, 67 (60%) sold for less than $2,000,000. And 97 (87%) sold for less than $5,000,000. So when we have 161 houses priced over $5,000,000 and are selling them at the rate of 24 per year, we have a 6.7 year inventory of high-end homes. Anyone tempted by a $10,000,000 house might consider that we have a 24 year supply of them – surely some of those sellers will be dropping their price, eventually. And, although there are only twelve spec homes in that category, at the rate of fewer than 2 sold per year, how strong are those builders? I think we’re in for an interesting time the next twelve months.

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Dear Megan – maybe you just need to redefine “success”

Greenwich’s own John Paul Tudor Jones spoke to NYC Buckley students the other day, warning that they would face failure in their lives. The Atlantic’s most excellent columnist Megan McArdle suspects that Buckley kids are not likely to experience real, total failure any more than a hedge funder like JPT Jones is.

[John Paul Tudor Jones)  “So here is the point:  you are going to meet the dragon of failure in your life.  You may not get into the school you want, or you may get kicked out of the school you are in.  You may get rejected by the girl of your dreams, or, God forbid, get into an accident beyond your control.  But the point is, everything happens for a reason.  At the time, it may not be clear.  And certainly the pain and the shame are going to be overwhelming and devastating.  But as sure as the sun comes up, there will come a time on the next day or next week or next year when you will grab that sword and tell him “Be gone, dragon.”

[McArdle:] This seems like a pretty safe bet when you’re talking to Buckley students, who have an ample safety net underneath them to allow them to bounce back from nearly any failure.  But would he really say this to, say, a 55 year old man who’d just been fired from his sales job?  Bad things–persistentbad things–happen to good people, and while it’s comforting to think of them as merely a way station, for lots of people that isn’t really true.   It only seems true to people who have been spectacular successes, because for them every failure actually just one more step towards the happy place they enjoy today.  Sure, you can always rise over adversity.  But a significant number of people will never again rise to the level they previously enjoyed.

It may seem incongruous for  a Greenwich blogger to suggest that there are more important things than material goods, but having had them, lost them, regained a little of them, I can report that their value is grossly over-rated. Satisfaction in my life seems to be dependent on my spiritual condition, my connection with friends and family and how I’m leading my life. When those weren’t going well, no amount of toys could make me believe life was good and, similarly, when they were, who cared about the dross?

So yes, a 55-year-old salesman (that would be me)  might very well lose his job today and have no hope of regaining his economic stature. Wall Street hotshots have even more to lose, farther to fall. While they’re falling, they probably don’t want to hear happy talk about the rosy life that awaits them but after bouncing off the bottom, if they look around and don’t spend all their time trying to return to the surface, they might find that life goes on, and is often improved, without what they had. So endeth the sermon.

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Remind me why we pay these guys a salary

House passes sweeping health care reform bill that will cover 95% of all Americans but neglects to discuss how much it would cost or how it would be paid for. Why don’t the pass laws ending poverty and establishing peace in the Middle East while they’re at it?

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Terrorist Lists are bad, unless they aren’t

Glenn Reynolds links to this New York Times story bemoaning the fact that people whose name appears on the federal government’s Terrorist List can still buy guns.

Says the professor:

SO LET ME GET THIS STRAIGHT: Terrorist watch lists are bad, and Orwellian, because they’re full of mistakes and put together without due process. But if you’re on one, you shouldn’t be allowed to buy a gun. Well, the Supreme Court says that gun ownership is a constitutional right, and you’re not normally supposed to lose a constitutional right because some bureaucrat puts you on a list without any due process. One suspects that this Eric Lichtblau story in the Times is part of a PR effort designed to gin up support for doing just that. The prominent role of Frank Lautenberg — traditional stalking-horse for the Brady Campaign, et al. — supports that suspicion.

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Madoff prosecutors: sentence him now, worry about restitution later

The feds tell sentencing judge that Madoff records are so scattered and in such disarray that they’ll need at least another 90 days and probably eternity, to figure out how much he stole from whom. But they’d still like to see the gentleman sentenced as scheduled a week from Monday, June 29th. With an order of restitution handed down later. I suppose they can’t leave Bernie in the Manhattan Correctional Center forever and if federal prison is more uncomfortable, I’m all for moving him on. On the other hand, if he’s going to more comfortable digs, why not keep him where he is now? Nothing’s too good for Bernie.

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Bad news for polar bears, great news for our country

The cap and trade carbon bill “blew up” in the House Thursday night. Pelosi has been trying to push the bill through before medical “reform” “takes the air out of it” (nice choice of words) but Blue Dog Democrats, mostly from states that actually, you know, use coal for energy, are balking. Besides, this article notes, the bill is 900+ pages long, no one has read it and with word that the initiative is dead in the Senate, no one in the House  wants to cut his constituents’ throats for a symbolic, doomed gesture. Good.

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