Good news for The Golden Girls
Not everything is bleak. This auctioneer is offering a Lakeside Chateau in New Canaan. It's a 6 bedroom, 7 bath place, has parking for 9 cars, pool, guesthouse and of course, that "Lake" they mention, which is no doubt a pond. Appraised at $9.5 million, starting bid is set at $3 million. New construction (of course).

This may present a solution for older folks who don't want to live alone in a big old mansion. If six couples snapped this up for $3 million, they could sell off their own unwanted digs, move in here and enjoy all those amenities like a brand new kitchen and that pool (oh - and an elevator and tennis court, too) etc. for far less than they'd pay at Edgehill (is that a play on "Edge of Death"?).
We'll leave Edgehill alone. With this latest idea, I may have just discovered a new marketing niche.

Update: Ya know, I've already received one comment from a reader who'd been discussing just this approach with her friends. Maybe it would work. Any interest? I'll find the mansion, you find your friends and won't that be fun. I'd want an invitation to the first party, though.

The center will not hold
From Instapundit.com

ROGER KIMBALL: Data points from the Windy City. Including this one: "The Illinois State pension fund is $44 billion in debt. That’s the worst in the country."
The problem of underfunded public pensions will make Fannie and Freddie look like small potatoes.

Here's a bit of a downer
This Englishman thinks we're in for a spot of trouble. Wish I could refute his pessimism, especially his concluding paragraphs, but right now, ....

At the end of that spiral there are two futures. One is Götterdämmerung, a financial catastrophe that does indeed bear comparison with the aftermath of 1929 – and please, disregard anyone who claims we are there, or anywhere near there, yet.

The other is a sadder, shabbier world perhaps more comparable to Britain in the 1950s, where luxuries were just that, mostly inaccessible, a step up the housing ladder meant years of penury ahead and credit was almost unheard of. Worry if you work in finance, estate agency, retail or other vulnerable areas, or if you are unable to trade out of your debts on your existing salary.

Among the survivors, of course, like cockroaches in a nuclear winter, will be many of Gordon Brown’s 600,000 or more workers taken on to the public payroll over the past decade, along with their copper-bottomed pensions. A world inherited by diversity inspectors and wheelie bin snoops. Dear God.

Have a nice weekend

If you think someone would have to be crazy to buy Greenwich real estate right now, here's hope
Loonies investing in U.S. properties!

I'm not saying this, he is.
Here's a long letter I just received from a mortgage broker. I suppose I don't disagree with everything in it - he got my email address right, for instance - but there isn't much common ground between us. I post it here as sort of a curiosity piece, so that you can, if interested, see what one portion of the industry is saying (the Raveis Mortgage rep I mentioned earlier today shares my sentiments, by the way, so this letter in no way reflects the entire globe of mortgage brokers thinking).

[sender's name omitted to protect the guilty]

Dear Valued Partner,

The Chinese have a proverb: "May you live in interesting times." And we are living through interesting times indeed.

Whatever the political posturing regarding the rescue plan, a plan needed to be passed. Credit markets are frozen and banks are going bust every day. This is not totally because of "toxic" mortgages. This has a lot to do with FASB 157, also known as "mark to market".

Each day, lenders must mark their assets to the marketplace. It's like you having to appraise your home everyday and, if your neighbor was under duress because she got very ill, divorced, lost her job and was forced to sell her home quickly, she may have sold it super cheap. Now, does that mean your house is worth that super cheap price, too? Clearly not. Why? Because you are not under duress. You have the time to sell your home and get a more normal price, which more accurately reflects true market conditions. But "mark to market" does not allow for this, which creates a vicious cycle.

Why is this so bad? Because, as lenders mark down their assets the amount that they have previously loaned becomes much riskier in relation to their assets. For example, say a bank has $1 million in assets and say they have $15 million in loans outstanding. Their ratio is an acceptable 15 to 1. But should they take a paper write down of $500 thousand due to "mark to market" requirements, their ratio suddenly changes to 30 to 1. This is because their assets are now only $500 thousand after taking the paper loss, while their loans outstanding are still $15 million. And at 30 to 1 this bank is viewed as a risky investment. So the stock price starts to get hit, it becomes harder to borrow, and most importantly harder to make money. The bank is then forced to sell some of its loans to reduce its ratio...at cheap prices. And this makes the vicious cycle continue.

And a quick look at the holdings of these loans show that 95% are problem free. Additionally, the Credit Default Swaps (CDS) that are used with the pools of mortgages are relatively safe. But this requires a bit of understanding. You see, when a pool of mortgage loans is put together it isn't just A paper or B paper etc. it's everything. It's got some A paper, B paper, C paper...and even what looks like toilet paper. An "A" investor buys the whole pool but because they are an "A" investor their safety is greater because they can avoid the first 20% (an example) of defaults. So they own the whole pool but are sheltered from the first batch of defaults, and for this they get the lowest rate of return. As you can figure from here the more risk investors want to take, the higher the return. So the investments are relatively safe, but the accounting rules currently place undue pressure on the banking institutions.

Now add to all this, the opportunistic "shorting" done on the financial stocks, much of it illegal because those shorts did not legitimately borrow shares (called naked shorting), and you exacerbate this whole problem. Thank goodness for the recent temporary ban on shorting in the financial sector. As for the plan, the government is the only one who can step in to do this. And they have to do this. And they will do this. The nauseating political posturing from both sides is just part of the process.

This is not easy to understand for the general public. In fact most politicians don't get this either. That's why it is a difficult yet critical bill for them to vote on.

Once this is done, it will take some time but the markets will stabilize. As for the real estate and mortgage industries, it will take a bit of time but we will make it through this. Rates will remain attractive and the influx of credit availability will help the housing market gradually improve. This ultimately will be the medicine needed to improve the situation overall.

They call it one-stop shopping, others call it fraud
A group of independent title insurance agents in Ohio is suing real estate brokers for steering customers to those firms' own title companies. Here in the Nutmeg State we don't have that exact problem - the lawyers beat us agents to the punch bowl and they select the title company and keep 60% of the commission - but we do have similar things going on, all under the rubric of one-stop shopping: buy a house and use the selling broker's inspection company, lawyer, mortgage company and whatever else these guys dream up (like, in California, where else? - Natural Hazard Disclosure Reports.

Home warranties? Check out this article and this quote from it:

Today, about 90% of the houses have home warranties, and Century 21 and all the Realogy companies now exclusively recommend AHS products, which are branded to each division. And we recommend every agent should advise their clients to obtain a home warranty through our exclusive provider-whether they are buying or selling-AHS is always reporting back to us about how they are taking care of our clients, and I am impressed with how client-oriented they are.

I'm not picking on any one company here - my own firm, Raveis, offers the same services and I'm sure they'd be pleased if I steered business their way. For sure, there are sometimes benefits to using a brokerage firm's other affiliates. I just sent a family member to Raveis Mortgage this week because it has (its own) money to lend, the rates were the best around and from personal experience I know that Mark Hawkins, Raevis Mortgage's Greenwich rep, does fine work. But I always recommend at least three real estate lawyers to buyer-clients and none has any business relationship with Raveis. Nothing against whomever my firm has selected but, after two decades of law practice, I have personal relationships with these guys - I know who the not-so-good lawyers are and I know that the three (or 5, or 10 - it's a pretty big pool) will do an excellent job. Same thing for house inspections, movers, insurance agents, etc.

So my advice to buyers, if any still exist, is to do your own investigation and don't blindly accept being steered to a brokerage's controlled or affiliated service firms. You'll probably get a good product with those companies, and you should certainly compare their charges to those of others, but do look around.

25 Keofferam

Troubled times call for bold action
That's my opinion; this builder obviously disagrees. This perfectly nice house on a great street in Old Greenwich hasn't sold at $5,995,000 so yesterday it was reduced 3.3% ($200,000) to $5,795,000. I'm friends with this builder and he builds a good house, but baby steps toward the new market reality will only, I fear, prolong the day of reckoning.

Around the corner, at 403 Sound Beach Avenue, the same builder has applied the same approach and reduced another project 3%, from $3,765,000 to $3,665,000. Who knows? Perhaps he has information the rest of us don't. I hope so.

487 North Street

Gone with the wind?
This beautiful property (across from Dingletown and just up on your left (or down - who remembers these things?) has a 1906 house on it, "renovated" in 1950. Okay, that probably means you'll want to do a little work, but it's a terrific house and it sits on 14 acres of spectacular lawn/meadow that, sadly, has been approved for a 5-lot subdivision. Originally offered at $23,500,000, it was reduced about 21% yesterday to $18,500,000. In better times that would surely generate a builder's interest, but I don't know of any builders in town who are actively searching for a project this size. Perhaps there are; I certainly don't pretend to know all the big builders in town, but speaking as a resident who has always admired the grace of the existing house and the beautiful sweep of the lawns surrounding it, I hope that some Russian fleeing from Putin and looking for a safe place to stash some of his cash picks this place up and keeps it just as it is.

Uh, oh, if Slappy the Happy Clown's posted, it must be bad news!
That's right, boys and girls, Slappy's stopped by our studios to give you the week end round up on our real estate market. Four single homes went to contract this week and three of those were under $2 million. The exception was 11 Cob Island Road which after initially asking $5.750 million, finally dropped its price to $4.95 and found a buyer. Slappy is very sorry to say that that modest number of contracts is half of last year's, and last year made Slappy unhappy. Oh well, don't forget to drink your Cocoa Marsh
and then it's time for most of you to go to bed!

Update: Slappy has noticed that the Greenwich Post's real estate section, which used to have a column called "On and Off the Market" and featured homes newly listed and homes newly sold has been rechristened. Now it's just called "On the Market" - the sales are gone. Slappy doesn't blame the Post for this - the poor paper just ran out of material for the "Off the Market" portion. It's a sign of the Times, not of the Post.

Luddites at Play

Environmentalists to solar power: Drop Dead!
I have long argued that the Greens desire to destroy modern civilization and bring back the green gardens of Eden for a select few members of the human race: them. I've been called an alarmist, an idiot and even a real estate agent but you tell me: if they don't want coal, oil, nuclear energy, solar power or wind power (if generated inside wilderness areas or within view of their homes or from their car windows), what will they support? Nothing? Then how will we survive? The Greens like to say, "by using new, wonderful technologies that would have been invented long ago if they hadn't been squashed by Dick Chaney and his oil companies and that will be, once the messiah is inaugurated" but juicy conspiracy theories have not and will not power anything. Until we learn to harness hot air.

What do we do next?
Well, the House has passed the bailout bill and the DJI, which had been up 300 points earlier today, is now up just 60, and still falling. California can't find anyone to lend it money, which is worth pondering; California's economy is larger than that of France's, yet no lender in the world seems to think it's capable of paying back its debts. Things are about to get really interesting, really fast.

Bringing order from disorder
From John Tierney. I only saw one - life must be good (explanation in link)

45 Byram Shore Road
A reader asked about this house and here's what the records show. In 1999 it was a nice, if un-renovated 1896 mansion ( a mansion by 1896 standards - it's 5,000 sq. ft.) with deep water access - good for tying up your yacht, don't you know. It sold for $5.375 that year and just a year later, the buyer resold it to its present owners for $6.473, untouched. The market used to be like that, once - remember? Anyway, now it's been completely restored (still the same size, however) and put up for sale at $13.250. That's not at all a crazy price for this street and in better conditions I'd expect it to go fairly quickly. Today? I just don't know. There are certainly buyers out there who still have money and this is a beautiful piece of property so, ... maybe. Like everything else these days, we'll just have to wait and see.

Mark to Market as explained by a dummy.
I've been having a good conversation via the comments section with a couple of financial experts about the merits of the SEC's proposal to let banks escape the accounting requirement that they "mark to market" their portfolios of toxic loans. Marking to market means adjusting a firm's books to reflect the actual market value of an asset. If the market price goes up, the asset's value is adjusted accordingly. If it drops, however, well it's quite the other way around.

Right now, banks don't like the rule because the market value of those toxic loans is zilch - no one wants them. "But there really is value there," the banks complain. "If we carry them at zero our capital requirements will rise and since we don't have any more money, we'll be forced into bankruptcy!" The government has listened and now wants to permit the banks to assign a value to these assets at some level, as-yet-undefined, above zero. I, in my ignorance, opined that this made sense because, down the road, there would be value realized in these loans and why put still more banks out of business while we all awaited a recovery? I was quickly set straight by a couple of readers. Once you abandon the mark to market rule, they warned, you abandon the last vestige of accounting discipline and open the floodgates to "creative accounting". This is what brought us the Savings and Loan disaster and it will happen again, if we permit it. (The only remaining section of the New York Times that I will read is its Business section and here's a good article on this topic by Floyd Norris, "Mistakes of the Past Live Again" ). By the way, Warren Buffett thinks the idea stinks, too - hearing him say so during his interview with Charlie Rose the other night sealed the deal for me.

Why is all this in a quasi-real estate column, aside from Wall Street's collapse affecting our property values? Because, in my opinion, many home sellers are acting like those banks. They "know" that their house is worth more than its current market value and they refuse to mark its price down. Home values will rise again, they reason, so why admit that, today, their house is worth 20% less than it was last year? That's fine, if you don't need or want to sell your house right now. No accounting rule will force you to make the adjustment (unless you go to refinance your house) and you can just sit and hope, fingers crossed, until prices start climbing again - maybe in 2014, maybe sooner, maybe later than that; your guess is no worse than mine. And there's a comfortable feeling believing that your house is still worth what it once was - I do it myself; I see no need to acknowledge that my own $2 million dumpster duck isn't worth that anymore and I like the reassuring feeling of wealth it givs me.

But I'm not trying to sell my house right now so I don't have to admit reality. Neither do you, unless you are ready to sell. If you are then, SEC laxness or not, you'll have to get real.

172 Milbank Avenue
Here we go again
Yesterday you could have bought this beautiful house for just $3.999 million. Today, because you dawdled, its builder demands $4.250 - ok, I'm sorry - won't you please let me have it at its original price?
The listing agent is a good friend of mine and a real expert in real estate so her decision to move the price up during a week when everything else seems to be falling apart strikes me as ...odd. I'll have to ask her about her reasoning next time I see her.

Point Counter-Point
Whither the real estate market? We link, you decide.

Real Estate market driving you crazy?
Don't worry. Thanks to the hard work of our Senators who spent the week saving the financial world, you'll soon have cheap mental care available. Of course, there are those who think that this onerous requirement will do to health care what the Community Reinvestment Act did to the mortgage industry, but don't worry, be happy! ("Here: take this pill")

We helped bankrupt the banks. Now we're doing the same thing for health care! What does "mental health parity" legislation, which has now been incorporated into the big "rescue" bill passed by the Dem-controlled Senate, have to do with the nation's financial crisis? ... P.S.: Actually, the thinking behind the push for "parity" and the now-questionable decades-long push to extend mortgages to "underserved" groups seems eerily parallel: 1) Stodgy/greedy old bankers say they can't afford to lend to minorities who don't meet traditional mortgage criteria. But we have a noble social goal to fulfill and we know they're wrong! ... 2) Stodgy/greedy old health plan administrators say they can't afford to cover hard-to-diagnose mental problems (e.g., anxiety) and substance abuse to the same extent that they cover easy-to-diagnose physical problems. But we have a noble social goal and ....

Update: How much pork did these public servants stuff into their maws? How about $112 billion? Remember, it's a "crisis".

Uh oh
Leveraged buy outs next to go down? This reporter thinks so

Take Realogy, formerly Cendant, the world's largest real estate franchisor, whose businesses include Century 21, Coldwell Banker and Sotheby's International Realty. Its debt trades at about 75 cents (U.S.) on the dollar, a level that implies a fairly high chance of default.

This is bad news for Leon Black's Apollo Management, one of the world's biggest private equity firms. Its purchase of Realogy, completed in the spring of 2007, when the buyout frenzy was at its height, valued the company at $8.5-billion. It's safe to assume Realogy is worth considerably less today as real estate values go into the tank.

Say good riddance to Bear Sterns
I previously mentioned that Bear Sterns facilitated penny stock firms by providing them clearing and financing services, thereby enabling those boiler rooms to rip off unsophisticated dupes; the article linked above gives another reason we should be glad to be shed of this firm. It was 1997, the Community Reinvestment Act (CRA) which opened the gates to sub-prime mortgages, undocumented loans and the whole panoply of dubious lending practices was just getting going, and guess who stepped through first?

The first public securitization of CRA loans started in 1997 by Bear Stearns. The number of CRA mortgage loans increased by 39 percent between 1993 and 1998, while other loans increased by only 17 percent.

I realize that Bear Sterns was followed through those gates by every Wall Streeter who could afford a calculator (Warren Buffet said last night that there were three types of people on Wall Street: innovators, imitators and idiots) but if the market's going to start somewhere weeding out these schnooks, why not employ the FIFO method? Bye bye, Bear Sterns.

So who's lying, the Democrat Majority Leader or his spokesman?

Senate Majority Leader Harry Reid, D-Nev., pressed for passage, with the alarming news that one of the country's premier insurance companies was about to go bankrupt if the crisis was not quickly resolved.

"We don't have a lot of leeway on time," Reid told reporters in the Capitol. "One of the individuals in the caucus today talked about a major insurance company -- a major insurance company -- one with a name that everyone knows that's on the verge of going bankrupt. That's what this is all about."

He did not identify the insurance company, and later in the day Reid spokesman Jim Manley said the senator was speaking broadly and not referring to anything specific.

"Senator Reid is not personally aware of any particular company being on the verge of bankruptcy," Manley wrote in an e-mail to ABCNews.com. "Rather, his comments were meant to refer to the conditions in the financial sector generally. He regrets any confusion his comments may have caused."

Regardless of which man lied, the comments of this fine senator sent insurance stocks plummeting. Call me a cynic, but it occurs to me that these Dem's have a vested interest in a ruined economy for the election and are doing their damndest to achieve it.

Shocker!
New York Film Festival screens movie on Che Guevera depicting his executions of political prisoners, homosexuals and anyone who got in his way! Well no, in fact the movie omits that sort of filthy propaganda and instead glorifies the sadistic blood-sucking piece of scum. Gets glowing reviews, though from the usual useful idiots. But I wonder - did the headline surprise you? If so, does that tell you something about Hollywood and its reptilian denizens?

Update: for another view of this hagiography, try this.

This probably won't be the last dumb assumption I make today but it was the first
"CEA" whose comments on marking to market, real estate and other matters I have praised, has no wife, she is a wife. If you'd like to see a picture of the idiot in command of this keyboard, look to your right.

What fun is this?
Credit crisis spreads a pall over Silicon Valley

This should be interesting
A reader brought to my attention this monster on Round Hill Road which has been on the market since May at $25 million. The land it sits on has a history. It was originally offered for sale in 2003 as 9.9 acres at $9.5 million. It sold for $8.1 million (so much for $9.5, but a man's grasp should exceed his reach and all that)in August 2005 and 4.3 acres were split off and sold that year to this builder for $7.25 million. He must have had second thoughts because in November 2006 he tried to resell it for $7.45 million but finding no takers, he proceeded to build this 22,185 sq. foot mansion. He finished in May, put it on the market, and there it sits.

I hold no malice toward this builder. To the contrary, he's built a succession of beautiful, extremely well crafted houses over the years and sold each of them in the $6 million range. I don't know what possessed him to pay $7.25 for a parcel of land, however, because at that price he either has to sell the house he built on it for over $20 million or lose his shirt. So I hope, for his sake, he finds a buyer, quickly. But in this market, I also hope he has a second shirt.

Update!
My brother Gideon points out that the Helmsley price reduction of $30 million now holds the record for the largest price reduction in Greenwich real estate history. I declined a reader's request to identify the "King of Over Pricing" earlier this week but it's now a matter of public record that David Ogilvy can claim the title of "King of Price Cuts". Imagine that client meeting. "We're going to require a price cut." "Okay,sure - how much? 100 thousand?" "Er, no, a little more than that; let's say, .... 30 million?"

Time out?
One of the most successful builders in town, Jordan Saper, bought 29 Calhoun Drive this past for July for $2.375. Even though the market was declining then, the property, listed at $2.495, moved in just 13 days. But July '08 is not October '08 and today Saper returned the place to the market, asking $2.450. I doubt he'll get that, but here's my point: if a builder like Saper has developed cold feet on proceeding with a project, what does that say about the prospects for other land deals? Nothing good, I suspect.

Hurry, hurry, hurry!
The Helmsley estate has been dropped from $125 million to $95 million, a saving of a full $30 million. If you've been waiting, now's your chance. I once hazarded a guess, when the Queen of Bedford Hills Women's Prison was still alive, that the place might be worth $45-$50 million. The listing broker was obviously far more optimistic than I and remains so even today - but that optimism is dipping.

Oh, come on!
Greenwich Post reports today yet another assault on our coffers: a "Victim" sues town for sewer back-up . Look - I certainly regret that this poor lady had raw sewage sloshed around her basement and that foul odors permeated her home but without more - an allegation as to how, exactly, the town was negligent, I don't want her reaching into my pocket. Sewers back up for all sorts of reasons but most of those: tree roots invading lines, too much stuff entering through the toilet, you name it; are the responsibility of the homeowner, not her fellow citizens. "Emotional harm? "Punitive damages?" 'Attorney's fees?". Somebody hand this lady a bucket of bleach and a mop and tell her to get over it.

I may be being unfair here and the lack of specificity may be due to lousy reporting by the Greenwich Post rather than lousy lawyering (on the subject of reporting, it adds nothing to learn that the litigant's a single mother and unemployed - irrelevant!) I'm not reassured however, by this quote from our former First Selectman, Roger Peterson, who represents the woman and who is demanding that his former constituents pay his fees:

“What happened to her is extraordinarily egregious that the town has not stepped in to remedy this situation and to compensate her for the damages she has suffered."

"What happened to her is extraordinarily egregious that the town"? Did Roger screw up the English language like this when he was in government? All I remember of the guy was him running around Greenwich in his (town-supplied) car, trying to arrest people by showing them his phony Police Commissioner badge.

Will the bailout work?
Assuming it passes the House, which I think it will. But I tried emailing my Congressman Chris Shays last night to urge him to vote against the damn thing (fat chance) and received a message that "the mailbox is full". The alternative contact site took about 4 minutes to load so I guess the man was hearing from (lots) of constituents. I assume Shay's no different than other members of Congress in this regard, and I also assume constituents don't want to see the bailout pass, so today should be interesting.
The wife of reader "CEA" (hey - this is a family blog, silhouettes of strippers notwithstanding, and her email proves it) has sent me a link to this article that predicts the bailout won't work. Good points made, but I'm pretty sure we're going to find out, beginning today. If so, let's pray that Warren Buffet's sceptical optimism is justified.

When did they move from Nigeria to South Africa?
Received the following from a Mr. Francis Khoumommo - I can't take advantage of this opportunity now but if you're feeling flush from the recent surge in Greenwich real estate values, perhaps you'll be interested. Call me if so - we'll do lunch.

ATTENTION, Mr Christ

financial consultant in South Africa and believe that this finds you and your family well as I would like to work together with you if you deem it necessary and rewarding to assist my client realize his personal investment plan.

My client, Dr. Irvin Khoza, the Vice President of South African Football Association and also the Chairperson Local Organizing Committee for the 2010 world cup tournament in South Africa.

I am consulting you on his instruction for his personal investment plan which I would like to discuss with you and know the possibility of how we can co-operate and work together to carry it out, which I believe will benefit both parties if handled with honesty.

A Rush to judgment?
Yale researchers have taken a closer look at those energy saving light bulbs our Congress has mandated. Their conclusion?
Mercury pollution will increase in many states and countries.

"Compact fluorescent lighting is an area where we're really pushing this alternative and all these policies are being enacted, but we're not looking at the potential unintended consequences of what we're doing," said study author Julie Beth Zimmerman, an assistant professor in Yale's Department of Chemical Engineering and its School of Forestry & Environmental Studies.

I know I annoy my Green friends when I disparage efforts to save our planet tomorrow but we're seeing so much of this foolishness - Congress, desperate to appear to be doing something about whatever crisis of the day has captured the media's attention, scurries around, comes up with a cosmetic solution, adds a whole bunch of unrelated pork barrel projects if the public frenzy permits that subterfuge and presto! Problem solved, let's move on to something else. A little deep breathing and a pause for reflection would only improve this process.

OK, I'm a naive chump
Earlier this week I commented on the bailout bill having swelled from 3 to 107 pages and asked, "how large will it grow before final passage?" I predicted 350 pages and I'll say right here, I'm a fool. The present bill the Senate's having fun with is already 400 pages long and growing fatter by the minute. And oh, the presents they're piling under the Christmas tree! Ya want mental health care free from insurance companies? You got it - they've screwed consumers long enough. No tariff on wooden arrows so Oregonian kids parents can afford toys? Hey, that's what we're here for. A bridge - ya wanna bridge? Go ahead, take one.

If these charlatans won't act like there's a crisis why on earth should we believe that one exists? I've been leaning in this direction and now I'm sure: we should stop this bill in its tracks and pray to God that Congress will finally recess and go home, where they can do less harm.

You will not steal this house!

I keep hearing tales from my colleagues about sellers who, upon receiving offers, acknowledge that in the present market they should probably accept it but decide they'll "hold out until the market recovers". This is a wonderful strategy if you have the resources and time to employ it but what none of us know is when the market will recover. Some of us think that we've just seen a market correction of 20% and think that the correction is not over and in fact probably has still more to go. If so, then we're in a new world where houses will not be worth what they were worth last year any time soon. Like, for the next 5 years. Others are more optimistic and predict a full recovery by this coming summer.
So you have a choice: accept the fact that the market has just shifted downward and plans to stay there for a long time or hang on and wait 9 months. If we come roaring back, lucky you. If prices keep dropping, you won't be happy.

Update: The Black Knight flinches
Our Somali pirates' ransom demand has dropped from $30M to $20M to, today, $5 million. When they resolve their difficulties over there, maybe they should come to Greenwich and advise certain spec builders on house pricing strategies.

How'd we get into this mortgage mess? Hell if I know.
Received today from "Jasmine Krnjetin | Mortgage Consultant":

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This product is really picking up interest so don't miss out on the next hot marketing opportunity
My process is simple - just email or call me

More thoughts on strippers and real estate pricing
(Thought that might get your attention.) As I've noted, the real estate firm trying to peddle its condos on Milbank is not providing a stripper but rather a new age therapist who will inspire and move us (Ed: how is that different from a stripper?]. But what's the reasoning here? Is it possible that we agents are unaware of the presence of two vacant condo units that have sat on the market since January 2007, or that their price, to everyone's great hilarity, was raised in July '07 from $5.4 million to $5.9 million, each? I don't think so; I think the builder has a pricing, not an awareness problem. It's possible that, over time, marketplace tastes will change and buyers will clamor for a unit where, with the help of a 12' scaling ladder, they can scramble up to Whole Foods and do their shopping. For 21 months now, however, the market's spoken rather eloquently: it doesn't like the price or the location. You can't change the location, and bringing on therapists or strippers or changing the description, as this one did, from "English Manor" to Euro-Style" will accomplish nothing. Drop the price a couple of million and maybe something will happen.

Marking to Market, Redux
I innocently opined yesterday that this seemed like a good idea and was promptly straightened out by two well reasoned comments from "CEA", who clearly is up on the subject (all while providing a neat, accurate comparison to real estate pricing in Greenwich). Now someone in the Wall Street Journal says, who knows what will happen - let's try it and find out. So now I'm thoroughly confused. Thoughts, CEA?

It's always something!
Okay, we got the carbon thing under control by shutting down our coal plants (too bad China's building something like 1,200 of the pesky things a week, but hey, we tried. Now it turns out that a worse pollutant, methane, is rushing out from the ocean floor. What do I have to do to save this planet, give up my freaking boat, for Crissake? Sheesh!

If you blame this spate of non-real estate posts on a dearth of real estate news, you'd be right.
Reviewing the hot sheet, no new listings of note, a handful of mediocre price reductions (odd that cutting $500,000 from a listing price could be described as mediocre but if you start high enough, it is) and no contracts. I'll be glad when Congress either does or does not pass the bailout bill because we might see people moving off the fence, one way or the other. Sellers might panic and cut their prices low enough to bestir buyers or buyers might gain confidence that it's safe to come out of the bedroom. I'll be cooling my heels until then - I just may have to send Amanda out on another mission (Oh no! Aaaaaaggghhh! - get over it).

This is sad, if expected news
We all knew that explorer/dare devil Steve Fossett was dead but now they've found his personal effects in the desert. While it's possible it's all a ruse designed to hide his escape to Cuba with Hank Paulson and the $700 billion, I think not. Too bad, because I always admired the guy. He did crazy stunts but at his expense, and was inspiring to this armchair wannabe.

Resurgence of the Luddites
They're coming to destroy civilization but we're not paying attention. Here's a nice round up of what these wackos are up to.

Why hide your light under a bushel?
I'm told that certain Sotheby's agents deny they're any part of Realogy Corp, wholly owned subsidiary of Apollo Management. While I can understand that no proper Greenwich agent would willingly admit association with the polyester, mustard-garbed horde at Century 21,the fact is, they're peas in the same corporate pod , as this press release states:

Sotheby's International Realty, Inc. (www.siroffices.com) is part of NRT Incorporated, the nation's largest residential real estate brokerage company. NRT, a subsidiary of Realogy Corporation (NYSE: H), operates Realogy's company-owned real estate brokerage offices.

That's a little snobbish, isn't it? And what about Sotheby's other sibling, Coldwell-Banker? Do Coldwell agents also get the cold shoulder? Harsh bud, dude.

Update: This article says that we can expect still more market consolidation as the real estate market tanks. GMAC Home Services, one of the largest brokerage firms in the U.S. was just taken over by a Canadian company and the deal lost one potential player:"Realogy was mentioned among the possible buyers of GMAC, but it has been saddled with debt in [its own] heavily leveraged buyout deal."

Sotheby's is doing just fine; if its Greenwich agents are lucky, maybe Realogy will sell off Century 21 and the Sotheby's folks can ditch their shame.

Good bye, New York Sun
I was never one of this start-up paper's subscribers and, living outside New York, rarely felt the need to see what it was saying about local politics. But the little I did read I liked and, as The New York Times used to say, you don't have to read it all but it's nice to know it's there. That's no longer true about the Times, of course, and now the Sun's gone too. An obituary of the paper, written by a Manhattan resident, is linked here.

News Flash! Political corruption nothing new
My pal Bernie Yudain has an interesting column in Greenwich Time today on the building of the Merritt Parkway. Bernie touches on the corruption in Hartford that had the Governor and his cronies leaking information on the proposed route to their co-conspirators who then went and bought what was essentially worthless farmland and sold it to the state for a fortune. What Bernie doesn't mention but what I think I recall from an oral history of this subject in Greenwich Library is that the pols weren't content with a one-off deal: they kept buying cheap and selling dear as many as three times, changing the route so as to make it all possible. People finally got tired of no highway and lots of graft and the pols had to settle on one route, thus ending the show.
Bernie, because he's a gentleman, also doesn't mention the name of the "tycoon" who bribed his way to getting the Merritt designers to throw a huge, curving bend around his property. I'm under no such handicap so here's a hint: the locals didn't name that deadly detour "Rockefeller's Loop" for nothing.

Here's a lousy idea
Some town workers are proposing a four day work week for employees. The proponents claim that it will boost employee morale and save our environment. I could care less about employee morale (attention, Amanda Von Stuckle fans - "I could care less" is a sarcastic expression used by writers when in fact they couldn't care less. Ed.]. If someone with a lifetime job, big benefits and a generous retirement plan is dissatisfied, let them go to work in the private sector. And our own Peter Tesei says, "some of the virtues of helping the environment I find specious." Good for you, Peter - so do the rest of us.
Here's the real reason to oppose this plan: have you ever tried to use Town Hall during the five days it's open now? Try to get a building permit or almost any other governmental document and you'll encounter offices closed most of the day, with odd hours like 12:15 to 12:20, then 3:07 to 3: 32 [more sarcasm - Ed]. That's how things are now - we want to create a full day of inaccessibility? I think not.

Another problem with the bailout
When our politicians are tossing around a figure like 700 kerbillion trillion dollars, a more modest sum like $25 billion can be slipped past taxpayer dupes with nary a peep. That's what they've just done by "loaning car makers what would once have been a huge sum.

I've seen no discussion on why we're doing this. No one doubts that if Chrysler (or Ford, or GM or all three) disappeared, other car makers would step in and provide all the cars we need. They'd probably be as nice and modern as my Honda and, like my car, made right here in the U.S. So other than bailing out some executives and preserving their jobs, why are we doing this? Because we can and, as noted, after $700 billion, what's a mere $25?

Ugly Betty

Bill Clark, who writes sporadically on his blog (I've tried to add an RSS feed, Bill so I'll be alerted to new postings) Greenwich Gossip took it upon himself to go down to Town Hall and demand a copy of the survey Greenwich conducted months ago on the performance of our schools. No wonder the authorities have tried to hide this thing: our Superintendent, Betty Sternberg, received dismal performance ratings from both parents and teachers alike. Sternberg's two-year contract expires this year. First Selectman Peter Tesei has suggested that we select the best principal we have in our schools and make that person the next Superintendent. That makes sense to me but regardless of who's chosen, can we really do any worse than Sternberg?

Thursday's debate - how neutral the moderator?

Claudette, who writes as the Greenwich Diva, has expressed ambivalent feelings towards the appointment of PBS reporter Gwen Ifel as moderator of tomorrow night's Palin-Biden debate. Claudette seems to fear that Ifel won't be up to the task of dismembering that sly devil, Governor Palin (Claudette and I are fast friends but we've never agreed on politics and this issue is no exception). I don't share her ambivalence because I think the debate organizers have purposefully selected an Obama partisan in the hope that she'll do exactly what Claudette dreams of.
Michelle Malkin points out that Ifel has a pro-Obama book due out in January. The book's a best seller if Obama wins; he loses, and it's a historical curiosity (I speak from experience - my own book, "The New Millionaire's Handbook" was written at the height of the dot.Com boom. Despite my urgings that the boom would bust and the people I'd described wouldn't be as funny without money, publication was delayed until November 2000. Result? 20,000 copies sold instead of the predicted 500,000).

Can Ifel be objective? I don't know, she's a good journalist, but I do find her a dubious choice as moderator.
Update
The Wall Street Journal's James Taranto, no liberal he, says fuhgeddaboutit. Palin will stand or fall on her performance and nothing any moderator, even Gwen Ifell (two "l"s, my experts advise me) can bring her down. It's all up to the candidate, Taranto says and, thinking about it, I believe he's right. Which is a relief because I've always respected Ifell's work. I'm still going to view her suspiciously tomorrow night but Taranto's right: if Palin can't stand up to a newscaster,let alone a schnook like Joe Biden, then she shouldn't be our Vice President.

Well isn't this boring!
I did some further digging and learned to my disappointment that there are two "Nuirkas" and only one of them takes off her clothes. This one doesn't or at least her promotional material doesn't mention it. From the description of what she does offer:

As a consultant, Niurka's approach goes beyond an organization's symptoms (low productivity, low morale, high turnover, etc.) and uncovers the core problems and attitudes creating those symptoms. Once the core problems have been identified, a strategy is formulated to align the organization's systems, structure, practices and functions with a clearly defined mission, set of core values, and short/long-term performance objectives.

I figure she's the one the real estate firm is sponsoring.
Speaking solely for myself, I've already seen the damn condo the broker's plugging and I'd rather chew glass than sit through a lecture on aligning my auras. Bring on the stripper and even the condo's price will seem more attractive.

This would seem to make sense
SEC eases mark-to-market rule for banks

Bedtime reading (if you enjoy nightmares)
Reader Craig Vorselen has sent me this link to a Crains New York article on layoffs in the financial industry and this equally cheerful one about foreclosures in NYC. If you don't like reading phrases like"jobs are evaporating across the financial industry" and "there's no one left for job seekers to network with anymore" you'd be better off avoiding the first story but if your misery loves company, read away.

For what it's worth (to coin a phrase) I used to console and counsel fellow lawyers who'd lost their corporate jobs and who wanted to know what it was like flying solo. They liked the bit about being their own boss but always looked crestfallen when I got to the parts like, "you only eat what you kill" and "the staff payroll's due every week - your salary isn't". Most went on to find another job they hated with another corporation. The few who broke free, either of the corporate world or law or both always seemed much happier. So if things look dark, remember that old annoying cliche that so often proves true: for every door that shuts, another one opens. Works for me.

Amazing wonders in real estate pricing
So there are three houses currently for sale on Old Church Road, a great street very close to town.
149 Old Church is an 1899 house, renovated in 2006, on 1.48 acres and assessed (70%) at $2.336 million. It started in April at $3.795 and has now dropped to $3.200. 5,920 sq.ft.
163 Old Church was built in 1950 and renovated in 2008. It's on 0.96 acres, assessed at $1,637 million and is currently offered for sale for $3.750.
56 Old Church was built in 1905 and never renovated - a buyer will have to start by gutting it entirely and starting anew. Unspecified square footage but far smaller than either of the first two. Assessed at $1.376, it's asking $3.750
million.
I have two questions: are these houses on the same street, and did either of the latter two ask what happened with the first one? Inquiring minds want to know.

What's happening with Bentleys?
By Amanda Von Stuckle

What with all this fooferall about house prices dropping a teensey bit I decided to vist my pal George Louderkin III, the wonderful salesman who sold me my first luxury car years ago when I cashed out of the internet boom. The man's a saint, as you can see.
George seemed relaxed, if unoccupied when I stopped by so after the obligatory buss on both cheeks and the air kiss (George is so emotive!) we got down to business.
AVS: So George, how are you doing, and how are my friends handling all this? Are they still buying your cars?
GL III: Absolutely, Amanda, like they've never heard of a CDO in their lives.
AVS: That's great. What about the other salesmen here - same story?
GL III: What other salesmen?
AVS: Gone?
GL III: Like yesterday's news, baby. Half are selling Fords, the other half went into real estate. Except for Jerry - remember Jerry? He's out back washing cars.
AVS: But you're doing okay?
GL III: You bet. especially with this new discount program we got going: 110% off.
AVS: 110%? but that's -
GL III: You got it, Baby. We pay you to take the sucker away. Ya want an Arnage? Top of the line Bentley. $255,000 retail, so we give you the car and pay you $25,500 for your trouble.
AVS: That's incredible. Does it come with, you know, tires and a radio?
GL III: Those things'll cost a little more; say, top out at $350 K.
AVS: So I'd get ...
GL III: $35,000. Uh huh.
AVS: How are you going to stay in business this way?
GL III: Volume, Baby, we make it back in volume. And especially if you want a loan.
AVS: Why would I want a loan if you're paying me to take the car?
GL III: It's a special deal we got going. We give you a little more, say $50 grand, you sign a promissory note for $100 big ones and we sell it.
AVS: But then I'd owe money ...
GL III: Not if no one knows who you are.
AVS: But you know who I am.
GL III: Not if you take out a loan I don't. Sign the papers - Miss Penelope Strong, I don't give a f..k, and I never heard of you in my life.
AVS: And this is legal?
GL III: Sure it is, Baby. just ask Hank Paulson.
AVS: Our Treasury Secretary? Is he in town?
GL III: He's staying up at Dickie Fuld's place, in the guest cottage. But yeah - call him, see if he sees anything wrong with this. I'm telling ya now, he won't: who do you think came up with the idea? Goldman Effin Sachs, that's who.
AVS: That's great - I'll take one. You have a convertible?
GL III: You got it. Any choice in color?

O.K., The Greenwich market is down

Have you considered investing in Nigeria?
But be careful, as the linked website warns,

Lagos Nigeria real estate market is a vast property market where a newcomer can get easily lost and cheated by scammers.
Lagos Nigeria property scammers are everywhere. Lose your guard and you risk losing your hard-earned money.

Fortunately for you, these guys say they're honest.

Denver Commercial Real Estate Exec:
This could get ugly.
But there's this:
"Santora added that Denver is one of the three strongest markets in the country, with the other two being Houston (because of its energy sector employment) and Washington, D.C."

Hmm - wonder what they grow in Washington, D.C.?

The stock market's up today, so far
I suspect that our President isn't the only one holding his breath.

Update
But the credit market, which powers the world's economy, is a mess. I think we're in trouble, Toto.

Offers I never finish reading

Or wouldn't if I didn't need material for this blog. I just received an invitation from a new real estate agency in town to meet someone named "Niurka" - no last name, which doesn't make me comfortable - to learn "What moves your clients to action", "Master your state of mind" and "Discover the driving force of your life by grasping the Power of Identity".
No mention of booze or mushrooms to further enhance this "Powerful Experience" but lucky attendees will have an opportunity to inspect an over-priced condominium that's been on the market since Noah began nailing wood together to form that boat. I Googled Niurka and found this Wikipedia entry:

Niurka Marcos (born Niurka Melanie Marcos Calle[citation needed] on November 25, 1967 in Havana, Cuba) is a Cuban singer, dancer, actress, and erotic model. She is better known simply as Niurka.

She was a little-known actress in Cuba. Marcos already had a son when she moved to Mexico, whom she left behind to look for a better future.

Niurka had a son, Kiko, in 1991 and a daughter, Romina in 1995. She has not disclosed the father of either child.

In Mexico, she had mild success acting in telenovelas with Televisa, until she met producer Juan Osorio. Marcos and Osorio began dating in 1998. Marcos then became a star in many of Osorio's productions. They moved in together and had a son, Emilio, in 2002.

Marcos and Osorio were planning to get married in February 2004. Early in January, however, she revealed to the Mexican media, and the Latin American media in the United States, that she had been having an affair with her Velo de Novia co-star Bobby Larios, and that she was leaving Osorio for Larios. The news caused a wide-spread scandal and Marcos has not spared Osorio from public insult, blaming the break-up on, among other things, lack of sexual relations between the two.

"Erotic model", eh? Maybe I do need another look at that condo.

This is for real

Children sing for Obama

If your video isn't working, here's the actual U-Tube description supplied by the film's creators:

Sing for Change chronicles a recent Sunday afternoon, when 22 children, ages 5-12, gathered to sing original songs in the belief that their singing would lift up our communities for the coming election. Light, hope, courage and love shine through these nonvoting children who believe that their very best contribution to the Obama campaign is to sing.

Sing for Change was a confluence of hard work, good will, and shared vision. Inspired by ideas raised at a grassroots Obama fundraiser, a music teacher, Kathy Sawada, and the children composed and rehearsed the songs in less than two weeks. Several musicians heard of the effort and volunteered to accompany the children. Parents and older siblings designed and provided the T-Shirts and the banner. There's a first for everything, but rarely do so many firsts come together at once: for the children and their parents, this is their first performance, first video, first banner, and first involvement with grassroots work on a presidential campaign.

As Sunday approached, a neighbor volunteered a home. Production wizards got wind of the project and offered their help in recording it. The likes of Jeff Zucker, Holly Schiffer, Peter Rosenfeld, Darin Moran, Jean Martin, Andy Blumenthal, and Nick Phoenix rearranged schedules to participate. Holly Schiffer was able to get three High Definition cameras (Panasonic HVX250's), and an AVID editing facility. When Jeff Zucker went to pick up the camera package, Ted Schilowitz happened to be there and offered a RED camera set up on a Steadi Cam.

What we accomplished in a few hours on a Sunday afternoon embodies the nature of the Obama campaign: its grassroots inspiration, its inclusiveness, its community building. People pitched in quickly for a cause that resonated with them. There were not many conditions: "Think this is a good idea? Want to help? Great. Sunday at 12:00." At the heart of the project were 22 children and their music. The willingness of all involved to come together for them was a testament to our hope, unity, courage, joy and belief in the future represented by these children.

We are offering the video to everyone, the Obama campaign and all media with high hopes that we can all join together to Sing for Change.

Well worth your time viewing. I find it a disturbing and disgusting example of brain washing tots but hey, you may love it - it's all about change or at least, a return to the Soviet Union of 1939.

Shuttered Banks
I've just come back from counting the number of banks in town: 3,217 all of which are, as of yesterday, owned by just one large institution. Will it need all these branches? Will it decide that commerce dictates that it maintain 217 offices on Greenwich Avenue? Probably - this is Greenwich, after all, but if not, we're going to have an awful lot of empty buildings in town. Remember when the oil companies figured out that they didn't really need gas stations on all four corners of every intersection? Something like that. Marshall Heaven's going to be busy.

[Editor's note: Attention, Amanda Von Stuckel fans - the above post employs the use of a literary device, satire. The author's purported count of bank offices is not intended to be understood as literally true; he has deliberately over-stated that number to make a point. It is intended to be (mildly) humerous. Thank you for your attention; please turn now to another blog]

47 Will Merry Lane

Is 80% the new 100?
This house was listed a while ago (April, 2007) for $1.895 million. Today, 1 1/2 years later, it's been reported as under contract. Last asking price (the actual agreed upon price is probably less) was $1.495. My expert readers will be sure to correct my math on this, but I calculate that as 79% of the original price.

Interesting, if true
One of my clients tells me that he received a flyer in the mail advertising an auction of a very expensive house we looked at together last year. It's a spec house whose price has been sinking like a stone so it wouldn't surprise me but until I can confirm the particulars I won't mention the address here. If it is going to auction (and even if it is not), I think we'll see plenty of spec houses on the auctioneer's block in the coming months. As Drudge would say, "developing ...."

Angry People
What scares me most about the current fuss is the anger I hear from so many people who should otherwise know better. These folks, fairly sophisticated Greenwich types who made nice livings as Wall Street prospered, are furious at the financial world and are determined to see people punished, regardless of whether that brings down the entire economy. I see the economic pie as expandable so if a Dickie Fuld pockets a kabillion trillion dollars, I don't see the result as less money for me. But these people do. In their dreams, I suspect that they'd like to see all the money in the country collected in Washington and redistributed "fairly" which really means, to them. Of course in 5 years the wizards, whoever that group proves to be in the next business cycle, will have once again ended up with the majority of that money, but my angry friends don't see that far. The want retribution now, and the hell with fixing the current problem.

Their Congressmen have returned home for the next two days to get a sense of public opinion. I'm very much afraid that they will act on that opinion and do nothing when they get back to Washington or worse, really screw things up.

On a brighter note, the dollar is way up against the Euro and the Pound. This is probably the perfect time to head out on vacation, preferably to a place without newspapers, and relax.

I'm not sure how much weight to give to these data

According to the Boston Globe,

the more money a Congressman received from the financial industry, the more likely he was to have voted for yesterday's bailout bill. Supporters of the bill collected 57% more money, on average. My personal opinion of our government servants is low enough that I don't really care how much they're skimming - they're all in on the game.
Update
The New York Times has pretty much the same story but they claim that Democrats who supported the bill received 88% more money from the financial industry than their Democrat colleagues who opposed it.

The Wall Street Journal has a bunch of links to articles on What Happens Next. Interesting - go see.

And, courtesy of the same paper, here's an article on the Case - Shiller Index of Housing Values. The index runs only through July 31, but I haven't seen any dramatic improvement since that date, at least in Greenwich, so I think you can use the data as a pretty good picture of what's going on.

Open House Report
Nothing out there of note, in my opinion. A few retreads, a few new listings with sellers who are a tad optimistic - I'll stop by in six months and see whether they've gotten the message, and that's about it.

One ray of sunshine: Another agent I know reports that a buyer who had been lingering, offering a really lowball offer and sticking to it, called yesterday, after the market had closed down 770 points, and raised his offer to a very acceptable level. You may choose to believe that that was the only buyer in town and the rest of us just lost him or, like me, you can see it as a sign that there are still buyers out there who have the financial resources to take advantage of a down market. A year ago, this house was worth at least $500,000 more than it was asking yesterday. When the market recovers and I believe it will, given time, the buyer will be able to pocket that difference. Nice work if you can get it.

From Mark Steyn:
" "As a general proposition, when told by unanimous elites that a particular course of action is urgent and necessary to avoid disaster, there's a lot to be said for going fishing."

Courtesy of Instapundit.com

A reader asks, "Hey Chris, during the good old days 2000-06, did you ever steer a prospective buyer away from a property that based on their income, you thought they couldn't afford even though the bank was willing to lend it? Just curious if you think realtors should take some blame here."

The answer is no. As a real estate lawyer, I considered at least part of my role to be a quasi-financial advisor and no one, not even mortgage traders! left any closing I conducted without having spent at least an hour reviewing and receiving an explanation of the loan documents: what the total amount borrowed would be, the monthly payment, the possible increase in that payment, if the loan was a variable rate, etc. Even then, I didn't inquire into my client's job security, other financial obligations or his mental stability. With the exception of the last, I considered those matters to be between the borrower and his bank.

And in those days the lenders did inquire into such matters. I didn't realize that, in later years, in other parts of the country, buyers (often "represented" by a bank's lawyer, not their own) were spending as little as 15 minutes at closings. In Greenwich, at least, that never happened - to this day, agents foolish enough to show up at the start of a closing will cool their heels for a long, long time while attorneys like Tom Ward or Jeremy Kaye review the docs with their clients. The next time you hear a real estate agent criticizing Fairfield County's use of attorneys in real estate transactions, you might consider whose interest is being served by those lawyers and why real estate agents might resent their presence.

But as an agent, did I ever caution a buyer against purchasing a house because of doubts about his ability to buy it? Nope. If someone comes to my office and says he can afford a $10 million house I assume that he is financially sophisticated enough to know what he can afford and that any lender who's going to put out that kind of money is going to thoroughly vet the applicant. That may be naive, especially in light of what's been revealed about lending practices in the past months, but it's not my role to screen buyers. I certainly don't want to waste my time looking at huge mansions with someone not qualified to buy a bicycle but digging into a person's finances isn't my job. I did, and do, try my best to get my clients the best house for their money and even some of my high-end clients will attest that they spent more time than they wanted to with me checking out $5 million houses that I thought were great buys when they really wanted a $10 million house (I like to think that they eventually discover that some $10 million houses are no better and worth no more than some $5 million homes on the market).

I have, to my memory, never urged a client to stretch beyond their stated comfort level to buy a house. Again, I consider clients to be financially sophisticated, in Greenwich, anyway, and I'm not ever going to advise them to abandon what their common sense tells them to do.

Finally, remember that, as of now, only 3% of existing mortgages are in default - I suspect the percentage in Greenwich is even lower. Like the Spanish Inquisition, no one expected the collapse of Bear Sterns and Lehman Brothers so the folks buying here were well-heeled, well educated people fully capable of making financial decisions without the assistance of what in many cases is a stranger. I suspect that, were I to pry too deeply into the wallet of someone I'd just met the day before, I'd lose a client, pronto. We're not selling tract houses to illegal immigrants here and I've never seen the need to treat my clients as though they were fresh from picking cabbages.

So do we agents share some of the blame? I don't think so - you, of course, are free to disagree and I'd be glad to receive your thoughts on the subject - I may very well be blinding myself to something obvious so that I can sleep at night.

Further thoughts: (updated)
If real estate agents offered financial advice, would buyers listen? Many would not. Check out some of the comments on this blog and you'll see many contemptuous entries that basically call this author a moron who should opine on real estate and nothing else. To these people, once one becomes a real estate agent all prior experience and training are wiped out. One guy, a lawyer (a group that, according to polls, ranks just above used car salesmen and below real estate agents in public esteem) first insults my education and knowledge and then cautions me to stick to writing about things I know something about, like granite counters. Do you think such a man would listen if I warned him that he was getting in over his head on a purchase? Whether I would tolerate him as a client is another matter, but for now, I'll stick to advising people on the relative value of houses, and nothing else. What I post on this blog, however, is my business.

David Stockman at CVS!
By Amanda Von Stuckle
(Editor's note: Amanda was going to take a long vacation, because her first day of blogging tired her out. The overwhelming positive response to her first appearance convinced us to bring her back at least one more time, just to satisfy those fans clamoring for more. Please keep those comments going - I know Amanda gets quite a chuckle from them.)

So you won't believe it but I was at CVS on Greenwich Avenue this morning and there was David Stockman - Ronald Regan, Conyer's Farm, indicted over that Collins & Aikman business, remember? - buying some "womanly items" for (I assume) his adorable wife Jennifer. "David!" I called. "Yoohoo! How's the trial going?" He must not have heard me so I tried again: "What about your art collection? I heard that you had to sell your de Koonings to pay legal fees - is that true?" He scowled at me now, so I guess he did hear me the first time. He grabbed the box and skedaddled. What do you think: sensitive about the trial, or just his pending impoverishment by those lawyers? When I think of what my own divorce cost me; well, let's just say that David and I could have a lot to talk about. Maybe next time, over a deelish cuppa cocoa at Versailles!

Here's a depressing way to end the evening.
The Wall Street Journal is pessimistic after today's vote. So am I.

Both he [Bernanke] and Paulson gave the politicians and Main Street too much credit. They have behaved too calmly, and too rationally for the nation to get the message.

Bernanke and Paulson should have made outrageous promises at the hearings and argued there is no way this will cost the taxpayer $700 billion, that the taxpayer will in fact make money. That works much better on the American psyche. America loves buying lottery tickets. Think of the bailout as a lottery ticket with much better odds.

Perhaps the greater failure by Bernanke, Paulson and President Bush was a reluctance to scare the hell out of people. A leader shows gravitas and concern, not panic. But, perhaps, a little panic wouldn’t hurt. Because you get the sense that Main Street is so busy being angry, that it isn’t sufficiently frightened. The public still doesn’t connect their lives to the crisis. But it should.

Because no bailout bill means that:

By the close of the stock market on Monday, the value of Main Street’s IRAs, 401Ks and pension plans will be worth a lot less than on Friday. How much? Hard to say, but a loss of 20% isn’t crazy.

By week’s end, there is a good chance that a raft of large banks will be taken over by federal regulators.

Within two weeks, as the banks hoard cash, the credit lines on most of Main Street’s credit cards will be reduced, foreclosure proceedings accelerated and car-leasing programs suspended.

Within a month, Main Street won’t be able to buy a home, a car or a tractor unless paid for in cash. As the credit markets shutdown, the mortgage, auto and small-business loan markets will nearly disappear. And the economy will grind to a near halt.

Far fetched? Not at all. It is the absence of credit–not too much of it–that causes great economic depressions.

Okay,that's too gloomy to end with. Try this sober but ultimately reassuring article by another WSJ columnist.

The Black Knight
Remember him from Monty Python and the Holy Grail? I'm reminded of the poor fellow by this matter of Somolian pirates off the coast of Africa, They're surrounded by ships and planes from five nations but the First Mate claims they'll never surrender.
"According to a broadcast on the BBC Somali service, the pirates said that they could see an American destroyer nearby and several military aircraft tracking them, but that they were not afraid.
“They can’t catch us like goats,” said a man who said he was a spokesman for the pirates. “We will fight, and everyone here will die with us.”

"It's just a scratch", I suppose.

Update
Here's a relief:They're only in it for the money

More Ouch
Floyd Norris (NYT) calculates the loss in stock value occasioned by our financial mess. Here's a hint: it's already trillions.

Phew!
For a moment today I thought that the King of over-pricing had actually brought a new listing to market at less than his client paid for it last year. If even the King is heading south, I thought, then this market is really in trouble. To my relief, I realized that I'd transposed a digit and the house was indeed priced so as to yield a hoped-for 5% annualized return. The seller won't get that price, of course, but at least the King's record is intact and all is right with the world.

Ow

Your house is on fire - do you care how it started?
Now that Congress has declined to put the fire out and we're all waiting to see what happens next, we have the luxury of examining the causes of this mess. I wrote about this several times last week, with links to supporting documents, but here's a better attempt by a better writer. Our conclusions are identical - you can't, or you shouldn't, blame our MBA from Harvard, George W. Bush.

Oh, Dear
posted by Amanda Von Stuckel
Back from lunch at Valebellas! and what a scene. What had been a lively, fun luncheon break descended into pandemonium when news hit that the bailout bill had flopped and the Dow was going down, down down. Dickie Fuld was the only one laughing - when your stock shares are trading at 30 cents, do you really care? Dickie doesn't, obviously.
Mel Gibson, just arrived from his spread at Malibu Colony, was eating with Ronnie Howard. Salad only for Mel - hope that was a non-alcoholic beer, buster - and a full 1 lb steak that only Manny V. can prepare so well, for Mr. Howard. Mel was going on and on, whining about being unable to sell his $35,000,000 hunk of plaster and timber on Old Mill Road, all while the real people of this town, the financial tycoons who have supported our charities, built our hospitals and made sure our private schools are the very, very best in the country were watching Bloomberg, mouths open, while their fortunes evaporated. I finally couldn't stand it any longer and I came over to Mel's table and shouted, "for cris'sake, Mel, get off the friggin' cross - we need the wood!"

Mel didn't think it was funny but Ronnie did. I do love that adorable little scamp!
More later,
Amanda

20 Spring Street
This house sold last week for $1.6 million, roughly 80% of its original price of $1.950. It went to contract back in July, so I wonder what it would fetch today?

Hold onto your hats!
Bailout bill fails. Dow down 700 points
This should be interesting.
Update:
This WSJ article was written just before the bill failed, but as it was becoming clear that it was going to. The reporter paints a gloomy picture of what's ahead. Wanna buy a house today? I didn't think so, but if you've been holding back from tossing a screwball, lower-than-low offer into the hopper, this might be the time to try it. You'll either thank me in three years or you'll be living in a cardboard shack in the Dust Bowl - who's to say?