Daily Archives: May 18, 2011

We’ll make it up on volume

Suzy plays Pacman

They must be passing out unusually strong stupid pills to our politicians lately because they’re falling all over themselves being even dumber than normal. Check out Maine’s Republican Senator Susan Collins, questioning Amtraks’ president, Joseph Boardman. Boardman has just explained that, while the Northeast corridor is profitable, the system as a whole loses money on each passenger because of its congressionally – mandated routes to nowhere. Collins is befuddled at the news that ridership and losses are both up:

“I don’t understand how you can be serving more passengers than ever before while losing more money”, she said, no doubt with furrowed brow.

The depressing thing about this story is that Collins is a senator – not a very bright one, admittedly, but a senator all the same, and she can’t grasp the concept that, if you lose money on each customer you can’t make it up on volume. For god’s sake, that was the punchline of a joke old when I was just ten years. Senator Collins and her colleagues wouldn’t have gotten the joke then and still don’t today. God spare us.


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In answer to a reader’s question

Someone refuses to believe the story about DSK’s rape of that maid because, he claims, the man is rich enough to hire a beautiful hooker so why would he pick on an older woman? Ha!I told him it was about power, not beauty, and I believed I was right, but that was before I’d seen a picture of the housekeeper Schwarzenegger impregnated. I rested my case before; I close it now.


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These guys must have been real estate agents in a past life

Planning on being raptured this May 21st or on some other date? Worried about who will care for the pets you’ll leave behind?  There are certified athiests who intend to stick around and, for a fee, Ugarte, for a fee, they promise to take care of them.


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Sales and a listing, two bits

5 partridge

5 Partridge Hollow, on and off the market since 2001 is now officially off the market, selling for $4.995 from a first ask of $6.5. The MLS will record that as a 100% sale, based on the last asking price. I figure it as 77%. To be honest, I’m shocked at this price, and not because I think it too low.

58 Perkins Road, a land sale, really, 3 acres in the 2 – acre zone, sold after 533 DOM for 1.425. It was asking $2.350 in 2009 when it first hit the market.
1010 North St

The owner of 1010 North Street (way up by Banksville) paid $660,000 for it in 2006, added a new furnace, electrical system, kitchen, bath, driveway, etc. etc. and tried reselling it for $989,000 in 2007. Bad timing. It’s been up for sale sporadically since that attempt failed and today it’s back, at $699,000. Renovating and flipping for profit used to be a no-brainer, but no longer.


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Apples to apples?

95 Butternut

95 Butternut Hollow Road has been returned to the market with a new broker and a new price: $7.195 vs. the $10.5 it sought in 2008-2009 and the $9.5, declining to $8.850 it failed to get in 2010. It’s a nifty old (1936) house renovated in 1994, sits on 4.5 acres in the R-2 zone and overlooks the reservoir, guaranteeing pleasant views for perpetuity (even if you aren’t permitted to dip your toes in the water).

I’m not convinced the seller has approached the right price, though, notwithstanding all the charms I mention above. The tax card lists the square footage as just 4,270 sq. ft., so the ask is $1.685 per foot. That’s a lot. There have been just two prior sales in this price range on Butternut – everything else drops quickly to the low $4’s (7 Butternut, $4.3 million 2007, two years on market) and then continues on down into the $2’s.

The two sales above this one’s asking price were for just one property, number  81, and unfortunately, its trend is not encouraging. It had 7.24 acres, the same water views, was renovated in 1996 and had 7,000 sq. ft. David Ogilvy listed and sold it for a cool $10 million in 1999 but when the buyer attempted to resell it two years later, it took 749 days before he unloaded it, in 2003, for $8.750.

So what’s this one worth? Darned if I know but eventually, the market will tell us. I hope that won’t be 749 days from now (it’s already at 633 DOM and counting).

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Exactly how dumb is Rick Sanitarium? This dumb.

Moron alert

John McCain doesn’t understand how enhanced interrogation works.” Upon my reading him this quote, Fudrucker proclaimed it “disqualifyingly stupid”. Frankie and I usually disagree on political matters but not this time. Jesus Christ.


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What’s wrong with 20% down?

According to the NAR, it’s the biggest threat to home ownership since banks started demanding that they be paid back. I thought 20% was always the norm until just recently. Apparently not, and will never be, if the Realtors and Washington pols get their way. Dumb idea.

Tell Congress: 20% Down Payments Put the American Dream Out of Reach

Could your clients afford a 20% down payment? Could you? Can you envision what your prospective client pool will look like if new regulations governing Qualified Residential Mortgages (QRM) take effect this year?

Neither can we. And neither can many elected officials in Congress who did not intend for these regulatory provisions to be so narrowly defined. We must continue our efforts to explain how detrimental the new QRM rules would be to the ongoing housing and lending crisis in America.

According to NAR Research, 60% of recent home buyers made less than a 20% down payment, and it would take 14 years for a typical person to save up a 20% down payment to buy a median-priced home.

Please contact Congress today and ask them to make it clear to the regulators that this proposed regulation was not their legislative intent and to instead implement a more reasonable Qualified Residential Mortgage (QRM) that will keep credit-worthy buyers in the market and able to acquire a loan.


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Freund’s going to Stamford

That’s the word, anyway.


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It’s baaack!

33 Meeting House

A beautiful house built in 2007 and on the market from April ’08 – April ’09 asking $8.995 with not a price reduction in that time. No one’s going to steal this house! It’s back today at the same price and I wonder if the seller will have better luck this time.

There’s no question that, in another location the identical house on identical land would command a huge price. But can it do so on Meeting House Road?  The highest sale I can find on the street is number 10, which sold for $4.150 (down from an ask of $5 million) back in early 2007, when we still had a real estate market. Meeting House is on the eastern side of town – not Greenwich’s highest drawing area, and is graced with the decaying, empty shell of Jimmy Le Cata’s 20,000 sq. foot reproduction of the Alamo. Regis’s unsold house is at the end of the street and a row of modest houses lines the entrance. So what’s this beauty doing among such neighbors?
I don’t get it, and buyers obviously shared my confusion two years ago. Perhaps things have changed.


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Getting there

3 Havemeyer Lane has been dropped to $545,000 today, which is below the $565 the owners paid in 2005 and substantially below the $789,000 they first asked for in 2009. I’m not sure that this should be its final price, but I do know people who would like to move to town on a $500,000 budget, and this might meet their needs.


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But will they let him run an international bank?

Greenwich pervert allowed to resume medical practice.


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Please, be my guest

350 lb “baby” threatens suicide if his Social Security supplemental is taken away.

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Ben Stein goes in the tank for DSK

I’m not suggesting that we all have to toss DSK to the wolves, and certainly it’s admirable when people stand up for others, but this piece by Ben Stein is so stupid and so damn blind that even he should be ashamed. As if. I long since stopped respecting Stein as an economist with anything useful to say – now I realize that he can’t think clearly about any subject.

2.) In life, events tend to follow patterns. People who commit crimes tend to be criminals, for example. Can anyone tell me any economists who have been convicted of violent sex crimes? Can anyone tell me of any heads of nonprofit international economic entities who have ever been charged and convicted of violent sexual crimes? Is it likely that just by chance this hotel maid found the only one in this category? Maybe Mr. Strauss-Kahn is guilty but if so, he is one of a kind, and criminals are not usually one of a kind.

3.) The prosecutors say that Mr. Strauss-Kahn “forced” the complainant to have oral and other sex with him. How? Did he have a gun? Did he have a knife? He’s a short fat old man. They were in a hotel with people passing by the room constantly, if it’s anything like the many hotels I am in. How did he intimidate her in that situation? And if he was so intimidating, why did she immediately feel un-intimidated enough to alert the authorities as to her story?

Just for fun, let’s look at just a few of Ben’s propositions.

“People who commit crimes tend to be criminals ….” Well, we know that DSK attempted to rape the god daughter of his first wife in 2002. He admitted as much to her mother later that year, confessing “I went crazy”. So I’d say DSK meets ben’s first criteria.

“Did he have a gun? …. He’s a fat old man … and if he’s that intimidating why did she immediately feel un-intimidated enough to alert the authorities? Again, Ben, let’s look at it another way: She claims that this “fat old man” grabbed her and threw her down, just as his god daughter was. A 61-year old man is capable of doing that, I’m pretty sure – I’m only three years away from that age and I could certainly do so now – why don’t you send your own daughter over and we’ll try it? As for “immediately reporting it to the authorities”, is there any better evidence of what happened? The claims one might be suspicious of are those coming a day or two later, not those reported immediately.

And so on. Ben Stein’s a wanker.


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Ah, the glory days

6 Wyckham Rd

6 Wyckham Hill Rd’s price was reduced to $5.450 today, down to its October ’10 price of $5.850. This is a fabulous house, owned by a friend of mine, and in better times it would probably sell for even more, despite its location near the Merritt and the noise therefrom.

But these aren’t better times. These owners, spurred on by one of Greenwich’s most aggressive agents, paid $5 million for this place in 2004 when the asking price was a mere $4.395 (and grossly overpriced at that, I thought at the time). The owners poured at least a million into converting what was essentially a POS into a gorgeous home, and now they’re hurting, bad.
My friend is a very savvy investor/Wall Streeter so I won’t blame his agent but even the most sophisticated money men don’t necessarily know enough about Greenwich real estate to make wise decisions. A good agent, not necessarily the most aggressive and most successful, will try to protect them from bad houses and locations, rather than urge them on to consumate a very bad deal.


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I’ve never trusted Baliwick

23 Baliwick

There’s no safe price over there, in my experience. The neighborhood saw a run up in prices up to maybe 2001 but it’s been crashing ever since. Take this house at 23 Baliwick, reported today as under contract after 1,184 days on market. Last asking price, and I’m betting it actually sells for less, was $1.950 million. The house sold for $1.850 in 2002 and was completely renovated, with new kitchen, baths,pool, etc. and resold to the current owner in 2004 for $2.717,500. They have been trying to unload it since 2008, starting at $2.995 and, as noted, finally ending up at just about its 2002 pre-renovation price.

That’s a long time to sit on an illiquid asset, and to watch a million bucks disappear must be painful. It’s a common tale over there because, once you exhaust the Westchester buyers looking to cross the border to save taxes, who’s left who wants it?

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QE2 and trouble ahead

So says economist Richard Koo.

 When the Fed buys a specific asset (in this case, longer-term Treasury securities), the price of that asset rises. That prompts private investors to re-direct their funds to other assets, which leads to a corresponding increase in the price of those assets.

And thus the impact on other markets:

The only remaining destinations for these funds were equities, commodities, and real estate. Real estate had just been through a bubble and remained characterized by heavy uncertainty. In commercial real estate, for example, banks—at the request of US authorities—are engaging in a policy of “pretend and extend” and offering loans to borrowers whose debt they would never roll over under ordinary circumstances. That means that current prices do not accurately reflect true market prices. Housing prices, meanwhile, resumed falling late in 2010.

UK house prices have been falling since mid-2010, and the Halifax House Price Index dropped 1.4% in April 2011 alone (the decline was 3.7% on a y-y basis).

The only remaining options for private-sector investors have been stocks and commodities. That, in my opinion, is why both markets have surged since the announcement of QE2.

His conclusion: QE2 was a huge gamble, and the end of these bubbles could exacerbate the great recession.


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I’ve had this same fruitless argument over radon

Nice chart comparing the nuclear radiation exposure of neighbors to Japan’s busted power plant to the exposure endured during a single airplane trip. As you should know but won’t, if you get your news only from television or the mainstream press, there’s really no comparison. Far better to park yourself next to the plant than to jet over to Japan to see it.

It’s the same situation, although even more pronounced, with the basement radon our EPA has got home buyers so fretted up about. Mommies who freak over radon think nothing about exposing their precious children to 1,000 X more radiation when they fly them to Disney World, once. Ignorance may be bliss, but it does lead to some very stupid decisions.


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Billons for nothing

California’s high-speed boondoggle, paid for by its own beleaguered taxpayers and, of course, us. The LA Times says, “soldier on”.  I’m sure they will, just as Connecticut is building its own train to nowhere. I’ve grown disouraged waiting for a taxpayer revolt that never happens. Are too few people actually paying taxes or do we as a nation really believe in tooth fairies, bullet trains and windmills?


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Out of contract

613 Steamboat Rd

I’m pretty sure that this house was reported with an accepted offer not long ago. Anyway, it’s still available, down to an asking price of $5.995 from $8.750. Both prices, in my opinion, are high, but the new number is better than the first. It’s a cool – looking house, albeit on 0.22 acre, but $1,000 per foot may be stretching it a bit.

By the way, the MLS hotsheet seems to be under the weather, so no current news is available. Either that or there is no news. That wouldn’t be good.

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Hope and change

Boston newspaper banned from White House coverage because of “bias”. The difference between libertarians and liberals is that the former would be just as appalled had this been done by Bush, while liberals will rush to defend Obummer – they just seem incapable of objective, rather than subjective thinking.

(thanks to reader Hark for supplying just the right photo)


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