What’s in it for Chicago?

The current President of the United States has decided not to join other world leaders at the November 9th ceremony marking the fall of the Berlin Wall because he’s too busy. “He sacrificed his free time on that Olympic trip” White House spokesman Scusie said today, “plus he hit like, wow, five tv Sunday talk shows – everyone except Fox, of course. So no way does he have time to go back to Germany, not when he’d just have to turn around and go back to Sweden or some place like that to get this big award for being the very bestest person in the world. He’s a very busy man.”

Indeed he is, Scusie, and aren’t we proud of him? Of course, to be fair to the man, perhaps he realizes that he and the crowd he has brought to Washington opposed Reagan and worked against the very policies that caused the wall to fall. To show up and even bask in the credit owed braver, wiser people would be the utmost in hypocrisy and, while I would expect that from The One, maybe  just this once he’s being honest.

Refusing to abandon ship

More and more homeowners, faced with foreclosure, are just stopping making payments and enjoying the extra cash they have to enjoy life while the bank takes its own sweet time throwing them out. In Florida, attorneys are making a very nice living helping homeowners delay the proceedings even longer. I’m sure Bridgeport, home base for most bankruptcy attorneys, has a full bank of lawyers eager to help  you do the same thing here.

Does it work? You bet. There’s one house I know of that has been in default and ready to go via foreclosure for over  a year now. The owners stopped making payment a long time ago when they realized a total loss was inevitable and have been trotting off to Europe and enjoying winter in the Caribbean ever since. Whereas they once had passed word to their broker that they’d accept any bid that would pay off their mortgage (about 2/3 of the then asking price) once their equity disappeared they decided to hold fast to the ask, knowing they won’t get it, because they prefer their current situation.

And why not? How many people have ethics that forbid them from taking advantage of a bank’s laxness? Not many, I suspect. Look for this to be the new model of homes for sale in Greenwich: over-priced and going nowhere, just the way their owners like it.

Abandon ship

WSJ: investors flee Galleon Group. It’s too bad – some excellent, honest people worked at the firm, several of them from Greenwich, but institutional investors don’t want to deal with a firm whose principal is the latest poster boy for ankle monitors and, after Madoff, can you imagine anyone sticking around and then trying to explain losses to clients with the explanation that Raj is presumed innocent until proved guilty? Nor can I.

UPDATE from Bloomberg 10/20/09:

Redemption requests totaled $1.3 billion, the Wall Street Journal reported yesterday. The firm has assets of $3.7 billion, including about $1 billion from Rajaratnam and employees, according to two people familiar with Galleon. Retaining clients and top managers may prove challenging as Rajaratnam fights the charges. At least two executive recruiters said they have already started talking to Galleon employees about moving to other hedge- fund shops.

“I suspect the super majority of assets will be redeemed,” said Ron Geffner, a lawyer at New York-based Sadis & Goldberg LLP, whose clients include hedge funds. “Certain portfolio managers and traders who have strong relationships with investors will find this an opportunity to start their own firms, or join other firms with assets in tow.”

To the extent that the taint is restricted to Raj, I’d think the rest of the Galleon people should be able to move on. I hope so.

Too soon stupid, too late smart

Financial world stops giving money to Democrats.

Entitlement theory

The Bovina Bloviator picks up a NY Post story about a mommy feeding junior human growth hormones to make him nice and tall.

Jeffrey Stern’s mother wanted him to have every advantage — from his schooling at Manhattan’s prestigious Dalton School to summer camp in the Berkshires.

So when Jeffrey, at age 11 and 4-foot-1, was a full foot shorter than everyone else in his class, she talked to an endocrinologist, who put him on human growth hormone.

“The doctors said that he was that he was destined to be taller,” Margot Stern said.

Jeffrey now stands 5-foot-7, but that’s not tall enough for the 16-year-old and his mother.

“They said that the height that’s owed to him is around 5-foot-8 or 5-foot-10,” she said. “I was going to give him a chance to achieve his growth potential.”

The Bloviator sees a warning here that eugenics is on the way and he’s probably right, but what struck me was Margot (the T is silent, as in “Harlot”) Stern’s claim that precious “is owed” another couple of inches. Owed by whom, pray tell – God? The doctors? Society? If it’s the former, Ms. Stern has an interesting view of the universe. If either of the latter two, then I suppose she’s just a typical New York liberal.

Avoiding childhood trauma

BBC gives Humpty Dumpty a happy ending.

The BBC has defended a decision to change the ending of nursery rhyme Humpty Dumpty.

A version used on the CBeebies channel was altered so rather than “couldn’t put Humpty together again” all the King’s horses “made Humpty happy again”. 

The broadcaster said the change was made purely for creative reasons rather than trying to give a soft version of the rhyme for children. 

A spokeswoman said: “We play nursery rhymes with their original lyrics all the time and the small change to Humpty Dumpty was done for no other reason than being creative and entertaining.” 

Labour MP Tom Harris told the Independent on Sunday: “For goodness sake. Obviously children will find it far too violent, distressing and horrific that Humpty should not be put back together again.

“This is what happens when adults try to make these kinds of judgments.”

He told the newspaper that he had also seen Little Miss Muffet changed on the channel, so that she made friends with the spider instead of running away. 

But the BBC spokeswoman said that alteration was made for similar creative reasons and there was “nothing more to it than that.”

Next – Jack does indeed fall down and break his crown but, thanks to ObamaKare, he receives immediate free medical care and is restored to health right away.

Welcome back to 2001

1 Ivanhoe Lane

This is a nice house on an acre off North Street that sold for $2.7 million in June, 2001. It came back on the market in 2005 asking $3.995 but didn’t sell until 2006, at $3.150. It was listed again in August of this year for $2.995 and today was dropped to $2.795 million. I would think that with a teensey bit of negotiating you could do even better than the 2001 buyers did.

 

 

52 Pecksland

Similarly, this house on Pecksland sold for $2 million in 2000, was renovated and offered for sale at $3.495 in 2005. The current owners paid full price for it then, tried re-selling it in 2008 for $3.995 and have now dropped it to $2.795 million. Its assessment is only $2.141 but in this case, I think it’s already a pretty good price.

Well this is embarrassing

New Scientist: World will cool for next decade.

FORECASTS of climate change are about to go seriously out of kilter. We could be about to enter one or even two decades of cooler temperatures, according to one of the world’s top climate modellers.

“People will say this is global warming disappearing,” Mojib Latif told more than 1500 climate scientists gathered at the UN’s World Climate Conference in Geneva, Switzerland, last week. “I am not one of the sceptics. However, we have to ask the nasty questions ourselves or other people will do it.”

Few climate scientists go as far as Latif, an author for the Intergovernmental Panel on Climate Change and a climate physicist at the Leibniz Institute of Marine Sciences at the University of Kiel, Germany. Yet many now agree that the short-term prognosis for climate change is less certain than once thought.

This is bad timing. The UN’s World Meteorological Organization had called the conference in order to draft a global plan on how to produce useful short-term climate predictions for different groups of people worldwide, from farmers worried about the next rainy season to doctors trying to predict malaria epidemics.

But while discussing how this might be done, some of the climate scientists admitted that, on such timescales, natural variability is at least as important as the long-term changes from global warming. “In many ways we know more about what will happen in the 2050s than next year,” said Vicky Pope at the UK’s Met Office.

Latif predicts that in the next few years a natural cooling trend will dominate the warming caused by humans. The cooling would be down to cyclical changes in the atmosphere and ocean currents in the North Atlantic, known as the North Atlantic Oscillation (NAO) and the Atlantic Meridional Oscillation (AMO).

Breaking with climate-change orthodoxy, Latif said the NAO was probably responsible for some of the strong warming seen around the globe in the past three decades. “But how much? The jury is still out,” he told the conference. The NAO is now moving into a phase that will cool the planet.

Latif says the NAO also explained the recent recovery of the Sahel region of Africa from the droughts of the 1970s and 1980s. James Murphy, head of climate prediction at the Met Office, agrees and also links the AMO to Indian monsoons, Atlantic hurricanes and sea ice loss in the Arctic. “The oceans are key to decadal natural variability,” he says.

Another favourite climate belief was overturned when Pope warned the conference that the dramatic Arctic ice loss in recent summers was partly a product of natural cycles rather than global warming. Preliminary reports suggest there has been much less melting this year than in 2007 or 2008.

Now, I know that the debate is over, but with only 45 days before Armageddon, can we afford to let this news out? Apparently not; the article is dated September 12th, but it hasn’t made it to the New York Times yet or even (gasp!) CBS News.

Bored in Greenwich

A reader complains that the available houses for sale right now are boring and I agree. We’re not getting new listings, just re-treads, with new brokers, the same brokers and even higher prices. When something “new’ does come on, it’s usually like one that hit the market today – owners paid $5 million for it in 2006, updated the baths and have it back on for $6.8. They may find it exciting to contemplate a $2 million profit on a couple of hundred thousand dollars (I’m being generous here) of home improvements but I find it dull – just another high end house going nowhere.

I am convinced that a seller could break free of this ennui by really slashing his price and standing apart from the crowd of otherwise undistinguished offerings. The owner of a house on Lockwood Road in Riverside did that, dropping from $1.575 ( a decent price as is) to $1.350 and selling immediately for $1.3. So it can work, but Lockwood was a relocation sale, meaning the owner was probably protected from loss by his employer. Those who aren’t aren’t willing to take a loss, yet, so they stand pat – as buyers are.

Speaking of newspapers

Greenwich Time seems to have a policy of never giving press space to bloggers (except for their own, like that cut-up and blogger, Executive Editor Nathan Milstein). Which must be causing some awkwardness for their reporters, who have to call all around to get comments on stories that appear on the local blogs, seeking third -hand knowledge rather than direct. Raj the Rat paying $4 million to bring Kenny Rogers up to Round Hill to sing “The Gambler” eleven times in a row? You read it here first, but the GT refers to Dealbreaker. And then asks readers with information of Raj and Galleon Group to drop a line to the reporter! (Hint to Neil – how do you think Dealbreaker got the story?).

Now I hear that a Lisa Sombebody is casting about for information on Peter Pervert’s Santa with Butt Plug statue, but she can’t call here, nosiree. Perhaps if the story shows up in the New York Post or the NY Times she’ll have a source to rely on.

I’m not the only local blogger to rely on (and credit) the Greenwich time for story ideas, and I’ll bet we’d all be happy to reciprocate if asked to. But i guess that would be beneath the Time’s dignity. S’okay with me.

Why don’t they start by axing Pinch and see how things go from there?

The New York Times is firing 8% – 100 employees – from its newsroom staff. I have a number of friends and relatives at the paper and, while I can’t stand what the publisher has done to his family’s heritage, I certainly don’t want to see my friends suffer for Pinch Sulzberger’s awful incompetence. But that’s usually how family-run businesses work, and this once good paper will probably end up with Pinch and his sisters sitting around an otherwise-empty newsroom, playing paper. Too bad.

Medicinal marijuana, maybe, but don’t try toking and running a brokerage firm

DealBreaker’s out with excerpts from the latest book detailing the failure of Bear Stearns and I must say, Chairman Jimmy Cayne’s pot smoking doesn’t seem to have helped things along. I’ll tell you this: if I were one of those hard working BS schnooks who went home on a Friday with $5 million locked up in my company’s stock and woke up Sunday to discover I was penniless, I’d be pee-ohed. And if I then learned that the guy running the ship had been indulging while on the bridge, I might go ask Cobra for the loan of a gun.

As everyone on the planet knows, Jimmy Cayne loves to get high. For some reason, however, he routinely downplays or outright denies any drug use, even though weed has done so much for him. First off, due to its mind clearing properties, Cayne has come up with some of his best ideas while stoned, which Wall Street Marijuana and Cough Syrup Expert Charlie Gasparino details in his new book, The Sell-Out. Coupla things JC came up with while he was “thinking straight,” which the ex-CEO has never been given adequate credit for are 1) to refer to Goldman as “Goldman Sucks” (which seems like such an obvious nickname but took several hits on the grav-bong to put in rotation) and 2) to bring down an 85 year-old institution for shits and giggles.

Second, Bear Stearns would not have soared to the heights it did (pre-crashing to the ground a burning fiery explosion) if it weren’t for the fact that Cayne regularly brought deals home by offering people some of his stash, which he claimed was the best on the Street and no one could resist, not even “a Jew.” From The Sell-Out:

Name Change poll, II

Several readers have objected to my referring to Peter Brant’s 72-foot-high “Santa with Butt Plug” statue that he’s erected (so to speak) on North Street. Well, that is its designated name, and I’m sure Peter Pervert would be disappointed if we called it something else, but he doesn’t run this blog, I do, and i always listen to my readers. So here’s a chance for readers to come up with something more creative. Reader Vineyard Vines will no doubt want to see “A briiliant work of heartbreaking genius” influenced, no doubt, by this summary of the Artist Paul McCarthy’s previous work:

His work evolved from painting to transgressive performance art, psychosexual events intended to fly in the face of social convention, testing the emotional limits of both artist and viewer. An example of this is his 1976 piece Class Fool, where McCarthy threw himself around a ketchup spattered classroom at the University of California, San Diego until dazed and injured. He then vomited several times and inserted a Barbie doll into his rectum.^[1] The piece ended when the audience could no longer stand to watch his performance.^[1]

Santa in Toyland

Hooray! Global warming scare to end in fifty days.

I’d been counting the years before the expiration of the doomsday global bunkum crowd’s deadline to save the world: we’re a year and-a-half into Dr. Hansen’s three year count, but now Britain’s Prime Minister has sped things up: if we don’t act within fifty days, we’re irrevocable doomed. Well God bless the man, there’s no way we’re going to do what he wants in that short a time frame so we can just twiddle our thumbs until December 8 and then we can join Mr. Brown in throwing up our hands, declaring that it’s too late to do anything, and going on about our business. In hip boots, presumably.

More distress sales coming to Greenwich?

According to the WSJ, Raj Rajaratnam’s former colleagues, including Choo Beng Lee, are ratting him out. The man’s going down and his Galleon Fund will be dead by the end of the month, which is a fitting end for a man who once paid Kenny Rogers $4 million to come up to the Round Hill place for a birthday bash and play “The Gambler’ eleven times, non-stop. “Somewhere in the darkness, the gambler he broke even”. And all that.

So let’s assume that 557 Round Hill will soon be on the block. Who else might be selling soon? Well, the presence of Choo Beng Lee as a cooperating witness in the broader FBI probe of insider trading is interesting because Mr. Lee once worked for SAC, Steven Cohen’s fund. Jealous competitors have long alleged that Cohen’s success could only come from trading on inside information, an allegation never substantiated. Does Lee have anything that might help prove their case? I have absolutely no idea, but it will be interesting to watch. Cohen’s got something like $45 million tied up in that house of his on Crown Lane which he’ll never get back, but it is certainly worth something. Maybe Jerry Dumas, across the street, will want to expand his land holdings.

And of course, there are always the rumors of another ongoing FBI investigation into mortgage fraud here in Greenwich committed by a certain bank, some of its officers and various developer/builders. These stories make the rounds periodically and nothing has come of them so far, but the latest word on the status of the investigation offers hope to real estate gossip columnists everywhere (or in Greenwich, anyway) that there will soon be grist for the mill. Not that I wish anything bad to happen to these people mind you ….

So we’ll just have to wait and see. My guess is that some large houses will be hitting the market this year, under less than optimum conditions, but that could be for any number of reasons, not just the presence of U.S. Marshals on the front stoop.

Get real

58 Parsonage Rd

The owners of this house on Parsonage paid $3.7 million for it in 2006. Everywhere else in town, prices have dropped substantially since then but these folks decided to list this year for $4.750, apparently under a delusion that they were entitled to a million dollar profit for staying there three years.

It’s down today to 43.795 which will probably still prove too high, but it’s an improvement.

Bidding war in Montauk

(Ankle monitor excluded)

The good news for Madoff investors: Bernie’s Montauk home sold for $9.41 million, nicely above U.S. Marshal’s asking price of $8.750. The bad news: winning bidder was Raj Rajaratnam.

Early morning reporting activity

Two sales reported from last week:

98 Lower Cross, a renovated house on 0.5 acre in the 4-acre zone, listed at $2.195 and sold for 84% of that, $1.850. Assessment was just $1.056 but in this case, I think the assessor, not the buyer, was off.

39 Hearthstone, $1.750 ask, sold for 82%, $1.450. Assessment was $1.428.

I think the fact that both these homes sold where they did is testament to their listing agents (Gideon Fountain and Joanne Gorka, respectively) recognizing what has happened to the market in the past year. Or at least, they didn’t start at 2004 prices and go up from there, as so many current listings have done.

And we have a contract reported, 21 Gatefield Drive, originally priced at $3.675 and marked down, after a year, to $2.895. Noo word on sale price yet, but assessment is $2.1. I was not enthusiastic about this house nor its location, but obviously someone else was. Which is how real estate works.

How about just getting the government out of the mortgage market?

Britain is imposing new standards on mortgage loans because, as a government spokesman says, “I think we just have to recognize that both firms, and indeed consumers, don’t always make the best decisions.”

Here in the United States we’re going in quite the opposite direction, pushing FHA loans (now 20% of the market, from 3% a year ago) now that Fannie Mae’s gone bust. The result: 20-year-olds buying houses with 3.5% down plus additional loans to guarantee they’ll be under water before the ink dries on their purchase contract.

It’s probably too late to reverse, but if there’s a chance we can undo the government take over of the mortgage market and avoid the paternalism of Britain’s approach, where acts of capitalism between consenting adults are prohibited, I think we should try. How? By unhooking the taxpayer from guaranteeing home loans, for one – that way, if a bank makes foolish choices it will fail, not the entire world’s economy. Two, eliminate the artificial stimulus of the interest deduction for homeowners. A level playing field where renting and buying had the same tax consequences and loans are not subsidized by taxpayer guarantees might bring som rationality to the world of real estate. Of course, Chris Dodd and the other friends on Angelo would miss out on some cash under this approach but they’re adaptable and I’m sure they’ll get by.