Daily Archives: April 25, 2010

Where’s the Dick?

You might wonder why Dick Blumenthal, scourge of fraudsters, hasn’t filed suit against his neighbor Michael Metter and the SongeTech scam. Two reasons: Blumenthal only files after someone else (in this case, the SEC) has done the heavy lifting, and  Metter owns WGCH – don’t want to offend the local radio station in an election year, even if it has only 12 listeners. What a wuss.

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Sandy Weil

A reader submits the following:

“Scene … Greenwich resident Sandy (Sanford) Weill, former chief executive of Citigroup Inc., as well as a philanthropist, was seen having dinner at Rebecca’s in the Glenville section of Greenwich last Saturday night.”

Gotta hand it to Sandy. He got out just in time. What a smart old fart!

Now, while his former peers are being vilified in the media and in front of congressional committees and by Obama himself, Sandy is enjoying dinner at Rebecca’s without a care in the world and is even being honored as a philanthropist, as in that $1 million in Citibank money he so generously donated to the 92nd Street Y in order to get Jack Grubman’s twin daughters admitted.

You go, Sandy!


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Holy goose poop, I never thought they were so stupid

Golden Goose

Senate ready to force banks to quit dealing in derivatives. It’s earnings from those that power real estate sales in New York, New Jersey and Connecticut. Got an offer on your house? Take it.


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We’re in the best of hands

Told to stop him, Port Authority cops let subway bomber pass.

Port Authority police were told to stop and search would-be subway bomber Najibullah Zazi’s car last September as he drove up to the George Washington Bridge—but waved him across without finding two pounds of explosives hidden inside.

The failure to uncover the explosives after an alert about Mr. Zazi from the Federal Bureau of Investigation has been widely discussed among police but never publicly disclosed. It stoked longstanding tensions between the Port Authority Police and the New York Police Department, which are more pronounced since the 9/11 attacks. The Port Authority is tasked with protecting the bridges, tunnels and major airports between New York and New Jersey.

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More on WGCH and Sponge Tech

No one seems to like these guys!

On the other hand, they might have a legitimate product if they can push this – you interested, Walt?

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What a difference fifty years have wrought

InstaPundit observes:

FRANK CAGLE IS dreading the Civil War sesquicentennial. I can see why, but by his own terms we’ve come a long way since the centennial, when the South was full of segregationist Democratic politicians who were standing in the schoolhouse door. Now we’ve got Republicans promising to stand up for constitutional rights!

Like a lot of Americans, I have great grandfathers who were on opposite sides of that fight, but, rebel that I am, I’m still glad that one fought for the Union.

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What am I, chopped liver? WGCH’s Metter sues Teri Buhl, but not me!

"Oh, we'd NEVER cheat YOU, big boy!"

Michael Metter, evil genius behind the Sponge Bob penny stock scam, is offended at Buhl, the NY Post and various other writers for exposing his fraud and has sued, but left me out of the fun. Gee, I thought I was pretty plain how I felt about this purported business enterprise, again and again and yet again, without result, but I’m willing to try one more time. By the way, the complaint is about the worst drafted piece of crap I’ve ever seen, so perhaps Metter’s lawyers will want to bring a separate action against me for calling them incompetent hacks who should never have been admitted to law school, let alone granted admission to the bar. I knew that on-line law schools were a bad idea.

UPDATE: Matchbook lawyer’s hiring explained: Turns out, SpongeTech’s passing rubber checks to people like the NY Islanders, and getting sued therefor. You can’t pay your bills, I guess you’re stuck with hiring your useless nephew as a lawyer.


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Something I’ve long advocated

WSJ: People staying put, improving the houses they already own.

According to an April 15 report from the Joint Center for Housing Studies at Harvard University, annual spending on remodeling is expected to accelerate this year, with nearly 5% growth over 2009. “This year could produce the first annual spending increase for the industry since 2006,” the peak of the housing boom, says center director Nicolas P. Retsinas.

But the forces driving today’s action couldn’t be more different from those during the boom. Back then, people wanted to renovate their places so that they could trade up to bigger homes, or because their home equity was soaring and they wanted to reinvest some of the spoils.

Now, the opposite is happening: Many people who bought during the boom years are accepting the reality that they won’t soon be swapping up for a sybaritic spread. Their mortgages may remain above water, but after years of falling home prices, their equity is so low that the transaction costs of buying a new house would leave little for a down payment.

In short, they are stuck.

“People have seen their down payments kind of wiped out,” says Harvard economist Jeremy Stein. “They are locked into their house. They can’t really move, even if they thought the other house was cheap and a good deal.”

So these people are making their homes more comfortable for a longer-than-expected stay. Setting aside old calculations of how much a particular improvement will add to resale value, they are making smaller tweaks that can make a big difference in livability. You might call it “psychological return on investment.”

Nowadays, say real-estate agents and contractors, smaller projects like updating kitchens and baths and humble attic-bedroom conversions are more popular, while two-story master suites and $100,000 kitchen blowouts are decidedly out of fashion. Hidden improvements like insulation also are on the rise, as people realize they won’t be able to pass on their drafts, leaks and other problems to the next guy. Tax credits that expire in 2010 are enticing people to make energy improvements, too.

One of the most cost-effective improvements, say contractors, is removing a wall to create an open kitchen-dining area. The project “makes the kitchen feel bigger and the kitchen and dining room more usable,” says Sarah Susanka, an architect and author of “The Not So Big House” book series. “It’s such a simple thing to do.” It can cost as little as a couple of thousand dollars, according to David Merrick, a home remodeler in Kensington.

A surprising number of people fall into the category of being above water on their mortgage but anchored to their property. According to First American Core Logic, at least 24.5 million borrowers in the U.S. have home equity of less than 25%, and of those, 13.2 million are above water. Considering the 9% in commissions and fees that typically come with buying and selling a house, as well as the typical 20% down payment on the new one, it is easy to see why people aren’t house-hopping like before.

This applies even to affluent professionals. Paul Sorbera, an executive recruiter in Greenwich, Conn., is seeing it firsthand among his clients. He says many financial-services executives “bought $2 million homes in the good times and have $1.3 million houses now because of the price decline. They have some money in the bank and can afford their current living standard, but moving is very impractical for them.”

Economists, whose models often assume the rationality of hypothetical consumers, say remodeling makes sense for such people. “If they don’t have a lot of equity in their houses and can’t move, they should have a propensity to improve rather than move,” says Richard K. Green, director of the University of Southern California’s Lusk Center for Real Estate. “When you renovate, you save a lot of transaction costs.”


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Greece to default? That seems likely

The call it “restructuring”, but the only question seems to be how much investors will lose.

As other economists begin to spin possibilities, they must confront the fact that there is no blueprint for restructuring the debt of a euro-zone country.

When European nations created the euro, they neglected to plan for the possibility that one of their own would become the sovereign equivalent of a subprime lender.

“There is no legal framework,” said Hans-Bernd Schäfer, an affiliate professor of law and economics at Bucerius Law School in Hamburg. The euro’s founders believed — foolishly, in retrospect — that a treaty setting debt and deficit limits would be enough. “I consider that a huge failure,” Mr. Schäfer said.


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Your future medical care


OTB – $1 billion handle, zero amenities and loses money. I bet I could do better.

The Yankee Clipper had been conceived as an upscale alternative to OTB’s usual street-front betting parlors, with a restaurant and bar and $5 admission. But at some point during its parent organization’s long slide into the red, those amenities fell away, leaving only the cover charge, in return for which OTB takes a smaller cut of the winnings.

Now horse-racing fans who choose to visit the Clipper (and there are not many) place their bets in the ghostly shell of a restaurant or from the empty bar, which, with its nautical motif and its lack of windows, might as well be on a lower deck of a sunken cruise ship.


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Thirty year anniversary of the failed Iranian hostage mission

Interesting article here.

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Crony Capitalism

Mattel persuades the government to put its competitors out of business, then receives its own exemption.

Mattel buys millions of items from China that violate American product-safety laws and standards. Congress reacts by punishing the entire industry, especially those small businesses that can’t afford independent testing, especially on products that don’t really need it. Thrift stores can’t resell merchandise without testing, making their business model impossible and threatening the charities that rely on those sales. Meanwhile, the economy of scale means that this law gives Mattel a competitiveadvantage from their own malfeasance — and they get the waiver on independent testing?

Yesterday, we discussed crony capitalism. This is exactly what is meant. This is a perfect example of government picking winners and losers in the marketplace through legislation written to be sympathetic to big businesses, and an enforcement mechanism that favors the big players even beyond the legislation Congress passed.


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