Daily Archives: April 6, 2010

Mortgage modification plan distorting economic signals

Or that’s what some people are postulating. Millions of house “owners” have stopped paying their mortgages  and are sitting around with $1,000 extra a month that no longer goes to their lender. So they’re spending it on other things, like vacations, tanning sessions or even, last resort probably,braces for their kids. Whatever, it’s tossing billion of bucks into the economy, but it’s all illusion and temporary. Which isn’t a good thing if you’re trying to figure out what’s happening in our economy.

Don’t know if that’s a valid argument, but it’s interesting.

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Can Eastern Middle School kids cross the Post Road safely?

A typical NoPo bus route

The school board thinks so and is canceling the short-lived experiment of providing school buses in (some portions of) NoPo. I’m a little skeptical – the Post Road’s a busy route, but I also remember that in my side of Riverside we all used a shortcut across the rail road tracks to get to that same school, so maybe, what’s a little traffic? I’ll bet NYC kids manage worse and besides, it’ll weed out the slow and careless.

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Can a state take archeologically significant property from an individual and pay him nothing?

Darned if I know, but there’s an interesting case going on in Rhode Island where the state is trying to do just that to prevent a developer from destroying the remains of an entire Indian village. Hmm – seems to me that wet lands regulations can do that, but my memory of the relevant case law is fuzzy and there is certainly a constitutional provision against complete takings (although the first suit, brought in federal court, was dismissed for lack of jurisdiction, so ….)

My sympathies are entirely with the archeologists who want to preserve this site, but is there a regulation that empowers the state to do this? And is it fair to impose the cost of such preservation on an individual instead of a state’s taxpayers?

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Did Greenwich Bank & Trust do the dirty with Bernie Madoff?

That’s what our aspiring senator but still, to his intense frustration, Attorney General Richard Blumenthal says he is investigating. In fact, he’s poking around GB&T’s parent, Westport National Bank, but same thing; all are owned, mostly, by Greenwich’s William Berkley, he with the huge spread up on Doubling Road and the insurance building on the corner of Steamboat Road.

NEW YORK, April 6 (Reuters) – The Connecticut Attorney General said on Tuesday he was looking into whether Westport National Bank and a Connecticut pension consultant aided and abetted Bernard Madoff in his $65 billion Ponzi scheme.

Connecticut Attorney General Richard Blumenthal said in a statement that his office and the Connecticut Department of Banking have been conducting “a wide-ranging investigation” into federally chartered Westport National Bank, pension consultant PSCC Services Inc and its owner Robert Silverman.

“Our investigation is focused on allegations that Westport National Bank, PSCC and Mr. Silverman operated investment funds that fed cash into Madoff’s massive fraud, skimming millions of dollars in fees for themselves,” Blumenthal said in the statement.

“I expect to make a decision soon regarding possible legal action.” Legal action could be aimed at recovering money for investors as well as fees.

Madoff is serving a 150-year prison sentence after pleading guilty to running the Ponzi scheme in which scores of investors were defrauded.

Connecticut Governor Jodi Rell said in a statement on Tuesday that the probe suggested that clients of the bank had invested some $59 million with Madoff, but received statements from the bank showing that they had invested in “shares” or “units” with specific market values.

“The probe found information indicating that Silverman and PSCC Services allegedly steered clients toward pooled investments for which Westport National Bank served as the nominal custodian and which were to be managed exclusively by Madoff’s company,” Connecticut Department of Banking Commissioner Howard Pitkin said in a statement.

Silverman and PSCC received more than $14 million in fees and Westport National Bank got $2.5 million in fees for managing the investments, the governor’s statement said.

UPDATE: Silverman seems to be a Wilton residence with a “pension consulting” practice  a half block from Westport National.

And there’s this, from the (February 9, 2009) New York Times:

The arrangement seemed odd to specialists on bank custodial services.

Custody accounts typically involve an array of specific services, explained Marshall N. Carter, the retired chairman and chief executive of State Street Bank, one of the largest custodial banks in the world. Those include settling customer trades, insuring safekeeping of the securities, servicing customer transfers and providing information about the portfolio.

In this case, no customer trades were settled and the safekeeping of securities was apparently left to Mr. Madoff. Finally, although the bank said it provided record keeping, tax reporting and “other ministerial services” to the custodial clients, Mr. Silverman was also being paid a “record keeping” fee.

Together, the fees paid to the bank and PSCC Services were almost 4 percent of the customers’ assets — well above normal levels for those services, according to Charles Ruffel, founder and director of Plan Sponsor, a financial information business serving institutional investors.

The bank’s custody fee was about three times the going rate, Mr. Ruffel said, and he called the record-keeping fee paid to PSCC “unconscionable.”

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California’s public pensions – a half trillion in the hole

Nothing new here for those like Pension Watch who has been following and reporting on it since 2004, but you can count on who’s going to be expected to cough up the cash to cover this and hint: it’s you and me.

An independent analysis of California’s three big pension funds has found a hidden shortfall of more than half a trillion dollars, several times the amount reported by the funds and more than six times the value of the state’s outstanding bonds.

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7.8 quake in Indonesia

Headline news today, gone tomorrow, unless a tsunami or something like that is spawned.

I heard an interesting show on NPR yesterday where Ira Flatow was discussing earthquakes with some expert on another (and I can’t find the link, damn it, but here’s the USGS data). Listeners were calling in blaming these quakes on everything from sunspots to global warming and they sounded entirely unconvinced when Flatow, his expert and, a geology professor who called in from the University of Houston all said the same thing: the earth sees 20-30 earthquakes above 7.0 every year, and literally hundreds of smaller (5-6.9) quakes. The media only pays attention when they strike near populated areas and cause damage, so the average geologically illiterate media consumer can be forgiven if they don’t know this. But really – earthquakes happen, a lot – it’s in the nature of our planter’s construction.

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Head for the hills!

Okay, so I was wrong - think I'll admit it?

WSJ columnist James Stewart, who I assume is not the gentleman pictured to the left, is crowing about calling the bottom of the residential market last summer and now claims that the office glut is ending. I wonder if the Journal passed out bongs as Christmas bonuses or Mr. Stewart is just determined to wish his way to happiness, whistling “Buffalo Gals Won’t You Come Out Tonight?” as he goes.

In any event, I think he’s wrong on both counts.

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Being John Malkovich isn’t as much as it once was, I guess

"Gimme back my money, you bastard!"

Malkovich sued Irving Picard, the Madoff trustee yesterday, claiming he’s entitled to the full $2.2 million he had “invested” with the man in November ’08, and not just the piddling $670,000 Picard has awarded him. I haven’t read the suit, but it sounds like another investor claim that they shouldn’t have their previous return of capital credited against them. If so, as Warner Wolf likes to say, “YOU LOSE!”

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Fung Shui

Shifting an un-compliant doorway

A friend writes to inform me that his North Stamford house sale just fell apart when the couple, Chinese, loved the house but were told by her brother that the place wasn’t Fung Shui compliant. I’ve heard several stories like this and no doubt we’ll see more as Fairfield County continues to attract buyers from different parts of the world.

I suggested he see if he could lure the buyers back with an offer to make the place compliant and then I Googled “Fung Shui consultants” to see if any such thing existed. By golly, the world and the Internet’s filled with them! Here’s one who caught my eye. The “Fung Shui to the celebrities” types didn’t seem so good.

And ML, you might give Fudrucker a call – he’s up to his eyeballs with Chinese these days, and can probably get you a name quite easily.

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Survivalism goes mainstream

Shelf-Reliance Thrive

Reader DC sent along this rather fascinating product: A year’s worth of survival supplies from Costco. As DC points out, Costco’s buyers are more upscale than Whole Foods (they’d better be – this package sells for $799, even with a $200 discount), so is this  telling us something about what the rich think of life under the new world order?

Probably not – Instapundit has long advocated for keeping a supply of emergency food on hand and, despite my occasional contributions to his TipJar, I don’t think he’s (super) rich yet. Most law professors aren’t, you know.

But if you really buy this much stuff for each person in your household (smaller quantities are also offered) you probably need a Greenwich-sized cottage of 10,000 sq. ft. to hold it all.

Here’s what’s included: One year’s supply for one adult. UPDATE: Take that figure with a grain of salt, if you will. I was prowling along the company’s own website (not a particularly easy thing to do, oddly enough – aren’t there tons of unemployed website designers out there?) with an eye toward buying some of their stuff in bulk and repackaging it for backpacking trips as a way to save money on MountainHouse meals and noticed a lot of the meals seem to have just 500-600 calories. If you’re sitting around the house wishing your electricity were back so you could watch the FoodNetwork, that might do it, but I recall, back in the day at NOLS in Wyoming’s Wind River  mountains we went through 3,000 calories a day and came out six weeks later thin as fence posts. Now we were toting 75-90 lb packs, including climbing gear, and operating above 5,000 feet, for the most part, so your mileage may differ. But these still strike me as a little light in the calorie department. You don’t want to end up eying Rover the Wonder Dog with ravenous intent nine months into your survival mode.

The THRIVE 1 Year Food Supply comes complete with 84 #10 (gallon size) cans of grains, fruits, veggies, protein & beans, dairy, and baking essentials. With over 5,000 servings and many foods with a shelf life of up to 25 years, this package will give you variety, nutrition, and peace of mind.

12 month food supply for 1 Person

6 month food supply for 2 People

3 month food supply for 4 People

Shipment arrives in 14 separate boxes

Grains and rice have a shelf life of up to 30 years

Freeze-dried foods have a shelf life of up to 25 years

Dehydrated foods have a shelf life of up to 15 years

Simple rehydration instructions, recipes, and helpful tips are included on each can

5,011 total servings

84 gallon-sized cans

This THRIVE 1 Year 1 Person Food Storage package contains 84 #10 (gallon size) cans. See below for specific package contents.

Grains

8 Cans of Instant White Rice (48 servings per can)

12 Cans of Hard White Winter Wheat (44 servings per can)

3 Cans of 6 Grain Pancake Mix (50 servings per can)

2 Cans of Elbow Macaroni (45 servings per can)

Vegetables

6 Cans of Dehydrated Potato Chunks (42 servings per can)

1 Can of Freeze-Dried Sweet Corn (46 servings per can)

1 Can of Freeze-Dried Green Peas (41 servings per can)

1 Cans of Dehydrated Chopped Onions (45 servings per can)

1 Can of Freeze-Dried Mushroom Pieces (48 servings per can)

1 Can of Freeze-Dried Broccoli (47 servings per can)

Fruits

2 Cans of Organic Apple Slices (48 servings per can)

2 Cans of Freeze-Dried Strawberries (45 servings per can)

1 Can of Freeze-Dried Blueberries (50 servings per can)

1 Can of Freeze-Dried Blackberries (49 servings per can)

2 Cans of Freeze-Dried Raspberries (48 servings per can)

Dairy

6 Cans of Powdered Milk (43 servings per can)

3 Cans of Chocolate Drink Mix (48 servings per can)

Proteins/Beans

The taste and texture of TVP (Textured Vegetable Protein) is consistent with real meat, making it a great addition to vegetarian diets

3 Cans of Bacon TVP (47 servings per can)

3 Cans of Beef TVP (44 servings per can)

3 Cans of Chicken TVP (45 servings per can)

2 Cans of Taco TVP (42 servings per can)

6 Cans of Pinto Beans (49 servings per can)

1 Can of Black Beans (49 servings per can)

2 Cans of Lima Beans (49 servings per can)

3 Cans of Lentils (52 servings per can)

6 Cans of Whole Eggs (236 servings per can)

Cooking Basics

2 Cans of White Sugar (46 servings per can)

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Yeah, this will work

Fed vows to keep eye out for speculative bubbles. Most bubbles – duh – are seen as bubbles only after they burst. As noted earlier today, Alan Greenspan is making the rounds of the talk shows insisting that no one could have seen the housing bubble coming and the fact that some did was solely attributed to luck (except that his new hedge fund boss, Paulson, who came a year late to the party yet still cleaned up, he was a genius!)

Look at the dot.com boom – any dummy who called that for the insanity that it was (I believe Mr. Greenspan referred to “irrational exuberance”) lost all of his investment clients and his shirt as the idiocy continued, year after year, ever-upward. Until it didn’t, of course.

I’m pretty sure our current crop of fed governors were all on Wall Street grabbing what they could during those years so why should they suddenly have gotten smart?

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It’s 10:o’clock – do you know where your house is?

Probably not on today’s open house list which was last updated yesterday afternoon at 4:30. The grand tour starts now and I have places to go, people to see, so I’m heading off to the a few that I’m interested in that were filed yesterday. The rest will surely show up some other day. We pay significant dues for this service: I wonder why?

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Roger Simon: President Wierdo goes No-Nukes

He’s not impressed with the new policy. On the other hand, Russia must. be. Sensing our president’s weakness, they have just announced that they reserve the right to dump the new Nuke treaty that Obama hasn’t even gotten through the Senate yet.

Not content with destroying our free market economy, Obama seems determined to reduce us to a weak, Third World power. I don’t think he likes us very much. Probably because he was born in Kenya.

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Should you expect your home’s value to rise?

Not nationally, no, says this economist. But the very factors he cites for why prices should not rise: availability of land and easy-to-get permits are very much not the case in Greenwich, where regulations are made more onerous every year and even marginal land is scarce.

So assuming the man is right  and he is a Haarvdh perfesser, after all, then I think we can be cautiously optimistic about Greenwich’s prospects. In the long run, if not in the next ten months.

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A contract

38 Bush Avenue

 

After two years, and after starting at $3.595 then dropping to $2.8 million and sticking there, this 1898 almost-Belle Haven house has  a contract. Nice house but when the listing claims “wonderful period details to restore”, you kind of guess that it’s a project. No word yet whether the sellers’ stubbornness paid off and they found a buyer at their price or whether they just grew tired of showing their house for two years, but we’ll know soon enough.

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Two interesting stories for this non-sports fan

Pretty cool that Butler came so close (61-59) losing on a missed 3-pointer at the buzzer. But I feel for the Butler kids – as one said, if it had been a blow-out, it would have been easier to take than to come so very, very close.

And Tiger’s back! I’m one of those who swell TV golf ratings when he’s in contention because even I, a non-golfer, enjoy watching superb play. I never cared about his sex-life – in fact, I can safely aver that I never thought of it even once before last November, and I’m just hoping he can get back to form and provide entertainment on rainy Sunday afternoons again.

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“Economics 101″ Cape Cod broker says

“Prices go down, sales go up.”

And this guy points out that the government’s effort to sustain artificially high real estate values is useless and is artificially prolonging the agony. Makes sense to me.

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So what exactly do these guys do?

The WSJ reports that Wall Street’s largest firms paid out $140 billion in compensation and bonuses last year, the highest payout in history. I’m all for it – big bucks mean big homes, I hope, but for the life of me I can’t see what these guys are engaged in except one big circle jerk. Reading Michael Lewis’ latest book, “The Big Short” (and Alan Greenspan’s preposterous claim, made last weekend, that the few people who saw what was happening in the mortgage swap business were “just lucky”, confirmed my long-held suspicion that there are a lot of clueless people in the canyons moving electrons around on their computer screens and not otherwise engaged in any useful activity.

I could be wrong and certainly I don’t begrudge the shell game the way I do when government do-gooders forcibly seize my money and redistribute as they think best, but really – is anything of importance going on down there?

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Diana Ross gets her cut

The Greenwich Tax Appeal board granted Diana Ross’s request for a lower assessment. Having seen the house, I think this is fair – as Jeff Reardon, head of the board noted, it’s a lovely old house but in need of some serious updating. I don’t think the original assessment reflected that. I was a little surprised that they gave no credit for the I-95 noise that afflicts this property but perhaps this had already been accounted for the first time.

That hedge funder on Byram Road received a cut that will save him $200 per year. I don’t know what his lawyer, Jeff Ramer, charges for his services, but I doubt this will prove to have been an economical or efficient use of resources.

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