Monthly Archives: September 2009

Hollywood protects its own

While Whoopie Goldberg, Angelica Houston and Woody Allen (there’s a surprise) rush to Roman Polanski’s defense, ABC News has thoughtfully brought back the original story of this animal plying a 13 year old girl with Quaaludes and champagne and then enjoying oral, vaginal and anal sex with her. “But he’s served his time,” his Hollywood friends wail. All 42 days of it. Let him rot in jail.


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First Amendment, restraint of trade and other musings

What are the rights of a member of a private organization like the National Association of Realtors (NAR) to speak candidly and publicly on the merits of a specific property? Depending on the outcome of today’s super-secret double-probation grievance hearing I endured today, I may have occasion to find out. Until now, the First Amendment was of academic interest to me but that may change.

On the one hand, a private organization can probably limit the free speech of its members to some extent – can you denounce the President of your country club without penalty, for instance? I think not. And, as a member of the NAR, I am bound to follow their ethical rules if I want to remain a member.

But membership in the NAR is not voluntary – I must belong if I want to sell real estate in Greenwich and I suspect that places membership, and the rights I give up, in a less powerful position vis a vis limiting my speech.

And then there are anti-trust considerations. Can the NAR, under the guise of enforcing an ethics rule, prevent a member from publicly opining on the relative values of specific properties? That may protect one group: sellers, but disadvantages the other half of the equation, buyers. I would think that shutting off that speech would constitute a restraint of trade, cutting buyers off from an objective (even, for the sake of argument, subjective) source of information on which to base, even partly, their decision to buy.

As noted, I am not a first Amendment scholar, and, pending a decision on sanctions that may or may or may not be levied against me, I don’t want to become one. But I certainly don’t intend to stop blogging or selling real estate, so if worse comes to worse, my legal education may continue.

This could be of interest to other people, because I am not the only real estate agent blogging out there nor am I the only member of a non-voluntary organization who blogs on matters that may be proscribed by an organization’s rules. I am headed to Europe tomorrow and blogging will be light or non-existent, depending on Internet access but I’ll be back, and we can resume the discussion then. In my absence, any First Amendment lawyers out there or you, Walter, over there at,  who wish to chime in, please fire away.


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Congress has its priorities

This story was reported on NPR last Sunday but I forgot to bring it up. Now that Instapundit has linked to it, though, here it is: we are about to lose our ability to send out deep space probes due to a lack of specialized plutonium fuel. If I have the NPR story right (and the link is to Popular Science which will have it right), we haven’t made any of this stuff since the 19080s and we have enough of it left for one, maybe two more flights. After that, nothing, and it will take at least eight years to make more.

Local flights can use solar energy but deep space has no light and hence, no fuel. Obama had put $30 million into next years budget to re-start production but the House cut that funding in half and the Senate eliminated it altogether. This strikes me as a real shame. As one scientist interviewed by NPR said, “ten years from now, people are going to look at this situation and ask, ‘what were they thinking?’ “. Where’s a spendthrift Congress when we need one?


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Shhh! Do you want to know a secret?

1 Benjamin Street

1 Benjamin Street

Overpriced houses don’t sell. And not because of blogs, either. This nice little Old Greenwich cape came on the market at $1.895 million. I showed it to my clients long after, when it had been marked down into the $1.4 range and they, unprompted by me, asked what the owners were smoking.

How could they have reached that conclusion? Because buyers, unlike many sellers, are realists. My clients had  spent several weeks with me looking at houses in this price range and they knew as well as the most experienced agent what was a good price and what was just nuts.

In any event, they didn’t bid on this one – they’ve grown tired of being told they’re being insulting – and it sold yesterday for $1.180. Which was a good, sensible price.


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Round Hill land sale, with house

549 Round Hill Rd

549 Round Hill Rd

1775 house on 7 + acres on the corner of Round Hill and Close (Burying? – up there somewhere). Listed at just $5.2 million, sold for $4.5 million. I guess that’s a useful data point for a building lot, though I hope the antique stays – it should, because 7 acres in a 4 acre zone leaves plenty of FAR room for a new house as well as this one.

19 Doverton, mentioned here yesterday as having been withdrawn/deleted, is in fact under contract. There were two listings, one as land, one as residential, and the agent pulled one yesterday but the contract didn’t make the MLS until this morning. Last asking oprice was $2.2 million.

UPDATE: 10/1/09: Reported sold today for $1.8 million. Assessment: $3 million. Put that in your pipe and smoke it.


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Carl Icahn shows why he’s Carl Icahn

Bails out Realogy, for a steep price.

It looks like the fixer-upper that billionaire investor Leon Black bought in real estate company Realogy won’t be foreclosed on just yet.

The company behind such big names as Century 21, Coldwell Banker and Corcoran Group, came this close to defaulting on its senior debt, but thanks to a deal struck with billionaire Carl Icahn, Realogy was able to pay down its senior loans and give itself some breathing room.

Realogy this week said it raised $515 million in new loans, with Icahn representing 30 percent of that money. It plans to use $365 million of the proceeds to reduce senior debt.

The company’s senior debt had required that Realogy’s debt load be no more than five times its cash flow, but as of the end of June, the company was slightly above that threshold. What’s more, a weak housing market has cut into cash flow, making the need to pare down the senior portion all the more urgent.

Black’s Apollo Management bought Realogy in a highly leveraged, $7.7 billion buyout in April 2007, but the weak credit markets and the mortgage crisis have helped the company to stay afloat.

Icahn earlier this year bought $311 million in Realogy loans at roughly 40 cents on the dollar, and under the deal announced this week Icahn is selling $91 million of that back to Apollo at about double what he paid, according to a source familiar with the matter.

On top of that, Icahn is swapping $220 million of the junior debt he holds for $150 million of newly issued notes that are more secure and pay a higher interest rate.

Long-term, Realogy still faces problems. The debt-to-cash-flow ratio is tested every quarter, and starting in April 2011, the ratio falls from 5 to 4.75.

What’s more, Realogy has only cut its overall debt by $70 million, leaving it on the hook for $6.3 billion that now commands a higher interest rate.

Apollo and Icahn declined to comment. Realogy declined to comment beyond clarifying what was in publicly released financial statements.

From what I read elsewhere, the “senior debt” Realogy paid back was debt Icahn had bought for 0.40 on the dollar and repaid himself yesterday at 0.80. Nice work if you can get it.


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New listing came on today at 110 Clapboard Ridge Road: 24,000 sq. feet, 5 + acres, pool, 7 bedrooms, etc. “House is under construction and being sold as is.”


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Lips sealed

garHearing concluded and I will honor the hearing panels’ order of confidentiality. Unless, of course, something comes of this and we all end up in a court of law. Until then, I will go back to selling houses, or trying to.


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One sale, one big contract

71 Richmond Hill Rd

71 Richmond Hill Rd

This house on Richmond Hill was originally listed for $4.050 million in 2003. It disappeared after a year and came back on in 2008 asking $3.975. It sold yesterday for $2.5 million. Assessment was $2.898.

On a brighter note for home sellers and as noted yesterday, 67 Harbor drive in Belle Haven, listed for $11.9 million has gone to contract at a price, I am told, in excess of $10 million. When I wrote in praise of this house a few months ago I said that one broker had wanted to list it at $19 million. Congratulations to the owners for not being snowed by a ridiculous price opinion and instead, pricing it right and selling it. That is the objective of listing your house, right?


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Walter Noel’s “I’m just a moron” defense still working

Writer  Erin Arvedlund, who first exposed Bernie Madoff’s Ponzi scheme in Barrons in 2001 (and was ignored, of course), spoke in Palm Beach Saturday to promote her new book.”Too Good to be true”. 

Financial journalist Erin Arvedlund was working for Barron’s in the spring of 2001 when she started hearing things about a hedge-fund manager name Bernard Madoff.

He supposedly ran a billion-dollar-plus fund and used a very exotic strategy called “split-strike conversion.”

She found it “very strange” that no one on the trading floor knew him or did business with him, yet he traded billions of dollars of options and made money every year.

Through one of her expert sources — whom she describes as a “turbo nerd” — Arvedlund found that Madoff’s returns seemed to be manufactured.

After further investigation, she discovered several red flags, including Madoff telling investors to keep quiet about him managing their money.

“As in any business, someone who’s doing well wants to brag about it,” Arvedlund said. “I found this very odd that he didn’t want anyone to know that he was running their money. This guy was running one of the biggest hedge funds on Wall Street. That didn’t make any sense.”

In her May 2001 article “Don’t Ask, Don’t Tell,” Arvedlund was the first financial journalist to question the mystery surrounding Madoff’s investment practices.

After Madoff’s arrest, Arvedlund wrote the book Too Good to Be True: The Rise and Fall of Bernie Madoff (Penguin/August 2009).

 Arvedlund spoke Thursday night to more than 60 people at the North Palm Beach home of Georgie Duber.


Fast forward eight years. Arvedlund left journalism in 2005, went to work at a hedge fund and was laid off in early December.

On Dec. 11, she was sitting in her Philadelphia apartment, wearing sweat pants and wondering what she was going to do with the rest of her life, when she heard on CNBC that Madoff had been arrested.

“I thought, ‘Holy s—-, they finally got him,'” she said.

“I didn’t know it was a Ponzi scheme. I didn’t know that it had grown to what he said was $65 billion in assets. All I had known all along was he wasn’t doing what he said he was doing.”

Arvedlund predicts there will be more indictments in the next couple of months.

“I think Peter Madoff (his brother) is most likely to get indicted, possibly before the end of the year,” she said. “He was signing off on phony statements, so right there he could go to jail.

“And then there’s the sons. … I think the Madoffs were a family built on theater, a huge Kabuki Theater. Bernie Madoff would bring in potential clients and they would see this bustling brokerage firm and they would think, ‘Wow, this guy’s doing great. I’m going to plunk down my life savings.’ And why wouldn’t they? Who do you ask for referrals? You ask your friend. You ask your family. On the other hand, there were some basic red flags and, sadly, the SEC didn’t pick up on those. I liken them to CSI meets The Office.”

Arvedlund: “Did Ruth (Madoff) know? I think Ruth was a very smart lady. She had a degree from college in an era when it was unusual for women to go to college. She ran the business with Bernie from day one. She kept the books for the legitimate brokerage firm. Bernie didn’t even need the (phony hedge fund). He was wealthy already (from the legitimate business). So why did he bother?”

Arvedlund:“There’ve been rumors around the last couple of weeks that the sons may be indicted. I think the reason that Frank DiPascali will not be sentenced until May is they’re trying to get as much information out of him as possible and that probably includes giving up family members.”

Arvedlund: “There’s some evidence that some of the bigger investors who were also fundraisers were using Madoff as a tax shelter. I think the reason they haven’t been indicted is because they don’t know what to charge them with yet. It might be a case like how they got Al Capone on tax evasion. Robert Jaffe was not a registered investment adviser, but it wasn’t illegal to raise money.”

Arthur K. Salomon, retired partner of Salomon Brothers and Citigroup: “I knew Bernie Madoff the day he started business … I knew Bernie and his wife … These people couldn’t cross the street by themselves. Your next book is to find out who did all this. His wife was smart, but she couldn’t have run it herself. Bernie couldn’t have run it. His friend, Walter Noel, he couldn’t cross the street either.”

Keep it up, Walter – if you’ve got Solomon fooled, surely the SEC will fall for the ruse too.


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I’ll take the headline, Your Honor

Norman Hsu, Hillary Clinton’s chief fund raiser, has been sentenced to jail for fraud, but Hsu knows for how long? The NY Times headline says 2 years, the article itself claims 24. If he’s smart, Hsu will show that headline to his jailer and try to arrange short term accommodations.


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He was innocent, not a charge was true …

cowWe’re off tomorrow to a super-secret double-probation grievance hearing to answer an angry Greenwich homeowner’s complaint that I made fun of his house and thus prevented its sale. Notwithstanding my profound regret at offending the poor sod, he apparently insists on going forward so I’ll be tied up most of the morning with a bank of white shoe lawyers and paralegals, armed with instant transcription machines and fighting for my professional life. Oh, the horror!

I’ll see about live-blogging the proceedings.


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Them furriners sure do like these condos, eh?

A unit at “Riverstone”, the condo project on the west bank of the Byram River that I consider to be part of Port Chester but the developers refer to as “Glenville” has gone to contract, after just six days,to a “foreign buyer”. That would be anyone from out of town, I guess. If I were a resident of New York state and could escape that jurisdiction’s taxes by buying a fresh new condo in Connecticut without having to get my feet wet, I’d do it. Otherwise, perhaps not.


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Realogy using government accountants

It’s borrowing more money at higher interest to pay back pushy creditors who are owed less money. But this all makes for a stronger, healthier company, just as the FDIC is growing stronger every day. Trust us.

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Dodd’s exquisite sense of timing

While federal investigators are still trying to round up the terrorists who planned to bomb New York City Chris Dodd has introduced legislation repealing the immunity the Senate gave to telephone companies who assisted the government in wiretapping those same people.

“We make our nation safer when we eliminate the false choice between liberty and security. But by granting retroactive immunity to the telecommunications companies who may have participated in warrantless wiretapping of American citizens, the Congress violated the protection of our citizen’s privacy and due process right, and we must not allow that to stand.”

I personally would feel much safer if the citizens of Connecticut would throw this deceitful, awful person out of office on his fat thieving ass and replace him with anyone else – anyone at all.


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But Barney Frank likes it

Back in 2005, pre-crash, a mortgage lender got busted because his employees were engaged in mortgage fraud. He wrote a book about it, warning that no-money-down home purchases guaranteed fraud. Sounds sensible, so yesterday’s announcement that Congress and Fannie Mae are teaming up to toss another $35 billion into new, no money down mortgage loans for dead beats makes me wonder whether we’ll see that money again? I think not.

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Change of plans or mind?

19 Doverton

19 Doverton

This building lot (it does have a tired contemporary on it) is assessed at almost $3 million but its sellers wisely asked less than that: $2.6 million at first, then marked it down to $2.2. Today, they deleted the listing and I don’t know whether that’s because they’ve come up with a better use for the property or have just decided to wait out the market.

I’ve never been wild about this land at any price; its four acres are mostly swamp and steep wooded hillside, so it’s pretty much a building envelope and that’s it – it doesn’t even offer much privacy, despite all that land. So I don’t know how much good waiting out the market will do – the land isn’t going to change until the next glacier resculpts it. Watch this space.

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No public option – tell me again why we’re doing this?

The Senate has voted to kill the “public option” provision of the health care bill. I was no more fond of this option than I was the entire bill, but what, exactly is now going to be accomplished by any medical bill enacted? There will be no systemic changes that stand any chance of cutting costs, so we’re left with a new expanded mandate and soaring costs. And this will help us how?

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I’d like next year’s commissions paid now, please

Not that the FDIC is broke, or anything, but it’s demanding that banks pay next year’s fees now, just to keep things current. Hey, if they aren’t worried, why should I lose sleep over this?

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Well D’uh

Tastes like chicken!

Tastes like chicken!

Pet food sales up “despite” recession.

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