Monthly Archives: May 2010

The Oil Drum

Very informative article on what they’re trying to do down there in Louisiana. There seems to still be hope that this will work, but it’s going to take some time to get it right.

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“Staging” real estate

The real estate columnist for the Greenwich Citizen (no link because they don’t know how to enable them) claims that houses “staged” by professionals sell, on average, in just 33 days. Staging is a vaguely defined word but it seems to include tossing around a bunch of fake antiques, a couple of throw pillows and putting up photographs of strangers who have never wandered within 500 miles of the house in question. It costs a whole bunch of money to hire this expertise, so I guess I’m not surprised that the columnist, “an accredited stager” whatever that means (exhibited good taste in picking picture frames at Walmart, I presume) cites a survey conducted by the professional stagers association. What a complete crock of hooey.

Look: there’s nothing wrong with removing clutter from your house, putting the kids up at Granny’s for a few months and putting down the old, flatulent dog, but paying a stager for his services? Give me a break. I have never seen a study that showed its effectiveness except for those conducted by the stagers themselves and I sure as hell know that staged home aren’t selling in 33 days. In fact, I know of one house in Cos Cob, listed and perhaps even staged by this very same columnist, that is entering its third year on the market. That’s not a failure due to inadequate staging – it’s just a dumb price.

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Jimbo’s no shrinking violet

Perhaps because he’s never claimed to be a Medal of Honor winner, Congressman Jim Himes is not abashed to show up at Memorial Day parades. In fact, he’ll be marching all weekend, poor fool, but not here.

Bridgeport, Connecticut – Congressman Jim Himes (CT-4) will participate in the following Memorial Day Parades to honor those who have served in the military.

WHO:                    Congressman Jim Himes

WHAT:                  Memorial Day Parades

Redding Memorial Day Parade

WHEN: Saturday, May 29 from 12:00pm to 1:00pm

Fairfield Memorial Day Parade

WHEN: Sunday, May 30 from 9:45am to 11:00am

Stamford Memorial Day Parade

WHEN: Sunday, May 30 from 11:45am to 1:30pm

Norwalk Memorial Day Parade

WHEN: Monday, May 31 from 10:00am to 11:15 am

Bridgeport Memorial Day Parade

WHEN: Monday, May 31 from 12:00pm to 1:15pm

Trumbull Memorial Day Parade

WHEN: Monday, May 31 from 2:00pm to 3:00pm

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Another sale, another contract

46 Meyer Place

This Riverside house with what could kindly be described as having “noise issues” was listed at $1.1 million originally and, almost two years later, has sold for $799,999 – someone obviously was determined not to go into the 8s.

 
97 Cognewaugh, purchased for $1.080 million in 2005, has gone to contract – last asking price: $995,000.

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Milton Friedman on the Euro

Reader Bored at Work sent along this amazing letter:

The following is an excerpt from a letter dated April 27, 1999 to Antonio Martino, a founding member of Forza Italia, from Milton Friedman

“Your views and mine are currently very much the same on the euro. . . . What most troubles me as it does you is that members of the euro have thrown away the key. Once the euro physically replaces the separate currencies, how in the world do you get out? It’s a major crisis. As a result, I would strongly agree with your view that the euro should be abandoned before January 1, 2002. At the same time, the odds are very great that it will not be abandoned. The defects of the euro will take some time to show up; nothing happens very rapidly in this area. There are fewer than three years to go. Even if difficulties deriving from the euro occur in those three years, the political system is unlikely to react quickly enough to end the euro. As a result, I think it would be very desirable for some systematic thought to be given to devising some way to get out of the straitjacket of the euro after 2002. The least Italy should do is to keep intact the plates which are used to produce lira.”

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Got any Aussie dollars? Sell ’em now.

I’ve been down on Australia since they laid  a punitive tax on their major industry, mining. Immediately after that tax was hiked, all the major mining companies announced they were scaling back or canceling their expansion plans, so there goes that source of income. Now, courtesy of BusinessInsider, there’s this fun chart showing the extent of Australia’s housing bubble. Whoo boy, should be fun times down under.

UPDATE: Just noticed that the chart’s dated 2009. I don’t believe the Aussie housing market has corrected yet, in which case it’s even more overdue for a crash, but I’ll check.

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So much for Obummer repairing our image abroad

Poll: 46% of Japanese think the United States sunk the S. Korean warship. They probably think we sank the Arizona, too.

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Why don’t they both come to our Old Greenwich parade, where everyone’s welcome?

Old Greenwich natives in Binney Park?

The fellow organizing the Memorial Day ceremony in Greenwich has disinvited Linda McMahon, apparently because he’s miffed his own candidate, Dick Blumenthal, has decided to stay home and cook dogs that day. In Old Greenwich, anyone who wants to march along is free to do so and they do, from Brownies to firefighters  – I’m sure a former Marine Reservist and a lady wrestler would be welcome too.

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A new Saab story

Saab 92

From Bloomberg:

May 28 (Bloomberg) — Spyker Cars NV, Saab Automobile’s owner, is in talks with automakers to share technology and an underbody for a new car based on a 1950s Saab model, Chief Executive Officer Victor Muller said in an interview.

“Discussions are already ongoing,” Muller said in a telephone interview yesterday on his way from Gothenburg, Sweden, to Saab’s plant in Trollhaettan. “That will be on my plate for the next 100 days.”

The new small car would be tear-drop shaped, inspired by the Saab 92 model that was in production between 1949 and 1956, he said, declining to say with whom he’s been negotiating.

Spyker, the Dutch maker of supercars, bought Saab in February from General Motors Co., completing a 14-month effort by GM to either unload the company or close it down. Saab, which begins selling the new 9-5 model May 31, has spent the last three months restarting production and severing the GM ties.

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Can hot air stop an oil leak?

We’ll soon find out. Politico:

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He must be an Obama believer

116 Sheephill Road

This is a nifty little (800 sq.ft.) cottage, built in 1895, with a decent yard. I liked it a lot when I saw it way back when, but it didn’t sell despite two years on the market and the reasonable price of $730,000.

It’s back today with a new broker and a new price: $790,000. Hmmm.

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A suprise in Riverside?

29 Spring Street

This place in Riverside  – very nice inside but almost no back yard – sold for $1.6 million in 2008 and was relisted just a month or so ago at $1.798. It’s reported as under contract this morning which, assuming it’s selling for anything close to its asking price, will be the first house I’m aware of that is selling for more than its price two years ago. Aberration or harbinger? Don’t know.

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F**k’em

UN to call for end of CIA drone attacks on Taliban.

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Greenwich tennis coach fired

Connie Jones fired. Sure seems like bullshit to me but then, I almost never believe cops and their stories.

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I’ve always thought Sherwood vs. Walker was wrongly decided

NSDAQ cancelled all trades based on a faulty algorithm a couple of weeks ago. Buyers in good faith were screwed, and idiots rewarded. Typical for Wall Street, but hardly just, or fair.

The best laid schemes of mice and men gang aft agley.  I thought I’d celebrate turning in my Contracts grades by musing about the contractual doctrine of mistake and the “Flash Crash” of May 6.

Here’s where the cows come in.  Lawyers, remember that old chestnut, Sherwood v. Walker? Buyer buys cow for “beef on the hoof” price, but before the cow is delivered, it’s discovered that she is pregnant, and therefore a “breeding cow” and considerably more valuable.  Seller claims the right to rescind because of mutual mistake: both buyer and seller were mistaken as to the fundamental nature of the transaction (barren vs. fertile cow), so the deal should be void.  Mutual mistake still applies today, with the Restatement requiring both parties to be mistaken about a basic assumption and that the claimant not bear the risk of the mistake.

On May 6th the DJIA plunged almost 1,000 points. Congressional hearings followed, and while there was widespread speculation that a “fat finger” entered some extra zeroes into a P&G order, that’s not the mistake that interests me.  It’s the fact that the stock exchanges canceled trades occurring between 2:40 and 3pm at prices 60% above or below the 2:40 price.  According to the WSJ, “Nasdaq alone canceled more than 10,000 trades involving at least 1.4 million shares.”

On what grounds?  Mutual mistake sprang to my mind.  Both parties think they’re getting the “true market price,” they’re mistaken as to that basic assumption.  As James Stewart put it, “presumably no rational person would sell Accenture for a penny.”

But what about the risk-bearing question?  Stewart asks interesting questions:

If the trades resulted from sophisticated algorithms that failed to take into account the possibility of such volatile trading conditions, do those investors deserve to be bailed out by having the trades unwound? Should MIT-trained engineers turned professional traders be protected from their lack of foresight? Conversely, should those traders who devised programs to take advantage of such a free fall be denied their profits?

In other words, where do we allocate the risk of mistake?  I like teaching Sherwood because it illustrates that most market transactions are premised on a mistake.  Sellers think the buyer is paying too much (caveat emptor), and buyers think the seller is charging too little (caveat vendor).  Where do we draw the line between “great deal” and mistake?

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Buhl is back

RBS Can’t Handle Journalist Printing the Truth

The group of British government-funded bank traders in Stamford, Royal Bank of Scotland, have thrown a hissy fit over one financial blog printing news about some of their most embarrassing mistakes. That’s right, RBS has now banned its employees from reading one of the funniest wall street publications – Dealbreaker – and cut off their Internet access to the site.

You see last week,when the bank lost power for about 10 minutes during trading hours, Dealbreaker correctly reported that it was because of an overflowing toilet. Yep, all that money they spent on their high-tech brand new building didn’t plan for bathroom problems and the water spilled into their communications closet. Well RBS brass didn’t take too kindly to a staffer outing this embarrassing mistake to Bess Levin at Dealbreaker and instead of just laughing it off, have now punished employees by taking away their daily DB reading.

Personally – I’ve always found the press people at RBS immature – like the fact they still won’t admit why rouge trader James Glover hasn’t been arrested after they turned him over to Feds for a stealing from Greenwich Capital clients.

I mean don’t you think the shareholders would like hear that US authorities actually got Glover to give the millions he took back and maybe gave him some jail time?

Anyway – Levin is now asking for all RBS insiders to give her a shout and tell any and all gossip about their bank bosses so she can print it. Please do – we need some fun finance stories around here now that Greenwich Time has failed to find a financial services reporter to cover the news hole I left them with.

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Fraud in New York: a Mini- Madoff

Somebody named Starr ripped off rich folks – nothing new there. But also arrested was Andrew Stein who was, back in the Koch administration a big deal.I mean, I remember the guy – he was president of the City Council, for goodness sake, and the son of a multi-millionaire. Can’t anyone down in Manhattan keep his zipper closed?

I do like this bit:

When Mr. Starr, 66, was arrested Thursday morning, he was found hiding in a closet, betrayed when agents spotted his shoes under the door.

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Should Obama be at Arlington on Monday?

Sorry you lost your kid, ma'am - can I play through?

He’s being criticized for blowing off the ceremony on Memorial Day and taking a vacation instead. On the one hand, I’m sympathetic to the President. He’s under pressure, and can doubtless use another break. On the other hand, George W. quit playing golf when the war started because, in his words, he “didn’t want the mother of a soldier just killed to see me on television having a good time”. [Update: turns out, I was paraphrasing, but close enough – check the link for what he said exactly]. Obama loves his golf and apparently feels it’s okay to keep it up because it was his predecessor who started the damn war, not he.

I come down on the side that he should be at Arlington – he’s Commander-in-Chief and regardless of who started this mess, he is now responsible for keeping the troops over there, and some are dying every day. I think that going without a golf outing comes with the job.

UPDATE: Another Instalanche! Thanks, Glenn.

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Why we’re all going down, hard

In New York, Patterson can’t even cut $11 million from the budget. Politicians can’t see past November’s elections (it’s probably mean to point out that Patterson can’t see at all) and will not, cannot stop their spending. It’s the same all across our fair land, including here in Connecticut, and I fear we’re all in for a very bad ending, soon.

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Too bad: I had higher hopes for this man

Pequot Capital and its founder, Arthur Samberg, are disgorging $28 million in profits (plus penalty ) illegally gained from trading on insider information. Samberg was once a highly reputable fellow, and it’s a shame to see he had feet of clay.

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