Daily Archives: June 8, 2010

The trouble with Internet real estate listings

28 Park Avenue in Old Greenwich as shown on a Century 21 website from Stamford. They got the zip right, but it’s downhill from there. The Google map they provide locates it on Park Avenue in Greenwich, the Trulia “comps” they offer are not only all central Greenwich properties, they’d be irrelevant even for the Greenwich Park Avenue: lower Lake Avenue, for instance, is just not the same, even if it’s less than a half-mile away.

I think the pictures are accurate, but it’s erroneous crap like this display that gives me hope I can make a living despite the Internet. At least, I hope, for another 10 or fifteen years.


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Teens face worst summer job market in 41 years

It’s all about displaced older workers, says MNBC. Possible, but you’d think MNBC might at least mention the new, higher minimum wage. The bad part about this , and the 50% unemployment rate among teenagers and young people in their twenties, is that the kids aren’t learning job skills. But if they do get a job, by golly, they’ll be paid a living wage!

Those who don’t can go fuck themselves.


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Instapundit: OKAY, I SEE THE ARGUMENT THAT OBAMA’S “ASS KICKING” BIT WAS UNPRESIDENTIAL, but to me, the biggest negative was that it made clear that we’ve got a President who doesn’t know whose ass to kick.


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A heartbeat away

Joe Biden off to Africa for some reason


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New price, old land

Eleven Hycliff, 5.74 great acres with a teardown off Riversville Road, was originally listed in 2007 for $4.995 million. Three years and four brokers later (it’s always the broker’s fault, never the price), it’s down to $2.875. The assessment is $2.476.

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Short sale pending

34 Boulder Brook

This house on Boulder Brook last sold for $1.750 million in 2007 and went into foreclosure not too long afterwards. Today it’s reported “pending”  – its last asking price was $1.369 and I imagine its ultimate sales price will be significantly less than that.

But short sales are tedious, so we won’t know, probably for months, whether this sale proceeds or falls apart. Stay tuned and maybe come back in October.


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(Another) $149 billion hole in our banking system

Banks lobby to keep loophole open

June 8 (Bloomberg) — U.S. banks are fighting to preserve the use of securities that help them appear better capitalized, even as their investments in each others’ notes perpetuate what one regulator calls a “downward spiral” of losses.

The cross-ownership, largely unnoticed by bank supervisors who generally discourage the practice, was made possible by a Wall Street innovation like the ones that allowed subprime mortgages to flourish. Small lenders, such as Riverside National Bank of Florida, were able to sell trust-preferred securities, known as TruPS, because investment bankers packaged them with those issued by dozens of other financial institutions.

Riverside, which started in a trailer in 1982, bought collateralized debt obligations made up of TruPS as it grew to 65 branches and $4.8 billion assets. When real estate soured and lenders racked up loan losses, Riverside and about 400 of its peers suspended interest payments on their TruPS, causing the CDOs to default or lose value and inflicting more harm on an industry suffering from the worst economy since the 1930s.

“The industry was self-financing, using loopholes in rules,” said Joseph Mason, a professor of finance at Louisiana State University in Baton Rouge. “Regulators weren’t keeping track of ownership of the capital, which became more difficult to do with the use of CDOs. The losses fed on each other.”

Collins Amendment

Riverside, based in Fort Pierce, Florida, was one of almost 1,400 U.S. lenders that had issued $149 billion of trust preferreds by the end of 2008, according to the Federal Reserve Bank of Philadelphia. About $45 billion of CDOs filled with such TruPS were created by the time the market for securitized debt shut down that year, according to PF2 Securities Evaluations, a New York-based company that helps banks and funds evaluate CDOs.

Congress may end the use of TruPS as capital, forcing banks that issued them to replenish their coffers. Banks are lobbying to remove a provision barring their use that was introduced by Maine Republican Susan Collins and included in the financial reform bill passed by the Senate last month. The Senate version is being reconciled with one passed by the House of Representatives in December that doesn’t include a ban.

“We’re still working to try to minimize the damage the amendment would do to bank-holding company capital,” said Mark Tenhundfeld, executive vice president of the American Bankers Association, which predicts the rule could force banks to raise as much as $130 billion of new capital or curtail lending.

If the Collins provision survives, it will come too late to undo the damage caused to Riverside, which was shut by the Federal Deposit Insurance Corp. on April 16. The bank has sued the firms that sold the TruPS CDOs for not disclosing that they were marketed to other lenders and the rating firms for overstating the creditworthiness of the securities.

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Hope and change

More than 1,400 former lawmakers, Hill staffers, have registered as financial service lobbyists since 2009.


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Water seeks its own level

Greenwich’s own, ex-Lehman Bros chief Dick Fuld is now working for a penny stock firm. I’m tempted to say something like, “how the mighty have fallen”  but everything Dick learned at Lehman is bound to come in handy in his new employment: ripping off gullible investors, stealing from old ladies and pulling wings off of flies.

Still, he’s got to be one of the few penny stock brokers out there with a $20 million spread in Greenwich, CT.


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Sales and contracts

2 Deer Lane

2 Deer Lane asked for $3.495 million in 2007, sold yesterday for $2.850. [corrected]

297 Round Hill sold for $5.7 in ’06. asked $7.250 in May, 2008 and sold two years later – yesterday – for $5.212. The sellers poured a ton of money into this place after they bought it, so that’s a hefty loss.
36 Harbor Drive, raw land in Belle Haven, did better. Sold for $3.4 in 2003, asked $4.9 in ’08 and finally sold for $3.850.
By way of contracts, 7 Deer Park Lane, which I mentioned yesterday was reported under contract and then deleted, is again under contract. Assuming it sticks this time, the sellers will surely be relieved. Marked down to $4.950 from $5.6.
69 Northridge, new construction in Havemeyer, was listed at $2.195 (down $200,000) and has a contract.
As does 28 Park Avenue in Old Greenwich, which sold new in 2006 for $1.9 and was last asking $2.1. We’ll see where it ended up.


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Suckers’ market or a new bull run?

Who knows, but here’s a post reminding us that in 1930, people assumed it was the latter and didn’t realize until later that they were in the Great Depression. Could be the same for housing, I’m thinking.

The early 1930 rally came after the market had fallen nearly 50% in the fall of 1929.  The spring 1930 rally took the market up nearly 50% again, to a level that was only about 20% below the previous peak.

That rally, of course, was also the biggest sucker’s rally in history.  After the market peaked in April 1930, it crashed again, eventually ending up down 89% from the 1929 high and more than 80% from the 1930 high.  The market did not reach the 1930 high again for another quarter of a century.

The rally that recently ended in April 2010 came after a crash that was actually slightly more severe than the 1929 crash (53% versus 48%).  It took the market up nearly 80% from the low!  The recent rally also lasted longer than the 1930 rally did–a year, as opposed to 6 months.

The 2009-2010 rally that ended in April, of course, may actually be the start of a great new bull market, one that will shake off the current “correction” and roar back to the market’s old highs.  On the other hand, it may yet also be another version of what happened in 1930–the start of another bear market that will take the market down for years (or even, gulp, to a new low).

Importantly, we won’t know for sure what today’s market is until we look at it with the genius of 20/20 hindsight.  As Peter Schiff pointed out yesterday, even as late as 1931, they didn’t know they were in a “Great Depression” yet.  On the contrary, the promise from the White House was that “prosperity is just around the corner.”


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Wag the dog

BP continues to work to contain and eventually stop the oil well mess, with the help of Exxon and Shell engineers, while our president, acting on the advice of his political aides, is trying desperately to look as though he’s tough and in charge. He wants to “kick ass”, he’s “keeping a boot on BP’s throat”, he’s filed criminal charges even before he knows what might have happened and now he says he’d fire BP’s chairman if the man worked for him. Well Obama does work for me, and I sure as hell look forward to firing him in 2012. A useless, little man.


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Democrats: Republican gubernatorial winners today are “already losers”

They’ve gone over to the Tea Party side and thus can’t win in November. There’s certainly an argument to be made there  – it’s possible that the voters really don’t want radical reform – but I think November will be an interesting month. Because, if the Democrats truly believe that more of the same is he key to success, one side or the other is going to be thoroughly trounced six moths from now.

Politico:  ‘DOWN THE RABBIT HOLE’ — The Democratic Governors Association will release a detailed memo Tuesday framing the day’s six gubernatorial primaries as contests that have severely weakened once-imposing Republican standard-bearers and undermined them as general election candidates. DGA executive director Nathan Daschle, writing under the header “Why today’s GOP winners are already losers,” argues that harsh Republican primaries have forced “candidates who wanted to run as moderates down the rabbit hole of the radical Tea Party right.” “What we’ve learned in this race for the base is that Meg Whitman really likes a border fence and insider stock deals at Goldman Sachs,” Daschle says, “that Terry Branstad needs Sarah Palin to burnish his conservative cred, and that Brian Sandoval is willing to alienate Latinos in his effort to appeal to conservatives and unglue himself from the largest tax increase in Nevada history.”

The memo runs — convincingly — through the ways Republicans have compromised themselves in races from California (“Whitman used former Gov. Pete Wilson – whose name is a four-letter word to most Latinos – as a surrogate in radio ads.”) to Maine (“The state’s Republican activists forced the candidates to take a rightward lurch when they voted overwhelming vote last month to adopt a Tea Party platform at the state Republican convention.”) Daschle’s takeaway, looking ahead to other primaries: “In states like Florida, Georgia and Wisconsin, expect the Tea Party phenomenon will dog candidates who would rather run general election campaigns. And the narrative they’ve laid out is the one that will haunt all of today’s winners until Nov. 2.”


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Man eaters?

Big cats are wild about Calvin Klein’s Obsession for Men

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