Property Grunt

Monday, March 31, 2008

Business is War

This is what it is all about.

Tony Montana: In this country, you gotta make the money first. Then when you get the money, you get the power. Then when you get the power, then you get the women.

Fed Leaders Ponder an Expanded Mission

Wall Street Bailout Could Forever Alter Role of Central Bank

When this article was initially published buddy, I had interesting IM conversation with an IM Buddy. I pointed out that what is really going is that the Fed Reserve wants to avoid a beach head of foreign investors on Wall Street and attached the Scarface quote, my IM buddy responded by saying no s**t and stated that if that were to occur then we would be living in a Banana Republic.

As far as I am concerned this has gone beyond a bailout this has now become a national security issue. Instead of occupying forces setting up bases, the fear is that they will establish a strong presence through American Financial Institutions and be able to influence American policies foreign or domestic.

Which brings me to the next realization about Greenspan and Bernanke. From my previous entry it was indicated that Greenspan was well aware of the sub prime criss that would be soon upon us yet instead of taking the initiative he chose to play Switzerland. I provided a variety of motivations ranging from his own self preservation to the chance it could make the situation worse.

I realize the biggest reason why Greenspan did not take the initiative because he probably realized that the Wall Street was biting off more than they could chew and eventually start blowing chunks. Then the Fed would be there to hold the bucket.

This crisis has given the Fed the opening to now only provide assistance to these institutions but to also tighten their grip on the industry.

During the late 80's, Jim Starlin wrote and illustrated a 4 issue mini series titled Gilgamesh II. It takes place in the not to distant future and after a massive war occurs, democracy and other forms of government completely useless because of the war. So the corporations of the world take it upon themselves to govern society.

I can't help feeling that the scenario presented in that comic book is slowly becoming a reality. Now Corporate America and American Government have crapped in the same toilet for years but what the Fed wants to do now is walking on unchartered ground.

Tuesday, March 25, 2008

I think I am safe for now.

Layoffs in the financial sector have been going on for the past couple of months and
I guess when the New York Times says is it is official but as Lockhart Steele, General of the Curbed army, Lockhart Steele said in a recent email "The other shoe never drops for media until after the fact."

In a current entry of Curbed, commentors went to town on the article like paparazzi spotting Britney Spears forgetting her undergarments.

Here are two quotes that I found quite sobering.

Last year, the finance industry was responsible for nearly a third of all wages earned in the city, the highest in modern times. And each Wall Street job supports three workers in other sectors.

The firm’s chief economist, Mark Zandi, said of the current round of cuts: “It won’t be the same kind of job loss. Back in ’01 or ’91, it was a much larger share of the back-office jobs. But in terms of compensation, the impact could be just as significant. One hedge fund job lost today is worth 10 back-office jobs in the last downturn.”

By the end of next year I can see a number of real estate brokerages shutting their doors, particularly the brokers that deal with rentals and have multiple storefronts. It is just a matter of trickle down economics. Once the trickle stops, everything dries up. The force that has the led charge in higher rents and selling prices for homes in New York City were FIRE (Finance Insurance and Real Estate) Teams. I would go as far as saying the money that a member of a FIRE team spent supported an army of people. When that source of income dries up those people have to look for other sources of income or go elsewhere for money. What is really frightening is that the after shocks are going to be felt in places we would never suspect.

I recently overheard a conversation between two people that was quite chilling.

“So I think they are going to analyze the situation and look at doing layoffs in April.”

“So another round will happen in April?”

“I guess but I think I am safe for now.”

Until next week.

Sunday, March 23, 2008

Moving Out

Awhile back Charles S Moore, who is the Director, Marketing and Corporate Relations OZ moving, contacted me and offered to do an interview about his company. Seeing this as an opportunity to learn more about the moving industry, I jumped at the chance.

1. Describe the origins of OZ moving. How did this company first begin? Where the name OZ come from?

The company was founded by Avi Oz that is where the name came from. In 1993, Oz Moving & Storage did something no other moving company would ever dream of – they started putting the telephone number of the NYS DOT (the government agency that licenses and regulates moving companies) on the back of every truck and in every single advertisement. Every client that called for an estimate was advised to just “call the DOT before making your final decision”. At the time, the moving industry was full of fly-by-night scammers that ripped of people and made millions of dollars before closing up shops and re-opening under another name. By drawing the client in with a “low-ball” price, they continued to get rich at the public’s expense, and make it harder for legitimate hard working companies to make a living. What did this lead to? Local NYC Movers cleaning up their act. It became harder for scammers to scam now that people were informed, and when the consumers were scammed, they called the DOT to help resolve their issues. It also helped the DOT and FBI pin down the criminals. The more people were educated, the more they turned to the DOT and the more information and evidence they were able to collect. While we may not be most loved among our competition, our clients sure appreciate our honesty and integrity.

2. From outward appearances it seems like anyone can be a mover since all you need is a couple of body builders, a U Haul truck and your good to go with your own moving business. However, I suspect it is a helluva lot more complicated than that. What are the operating costs of a moving business? What do you seek in employees?

It takes two guys and a truck to start a moving company. However, it takes a lot more in NYC to get into certain buildings. Many of the luxury buildings in NYC require $1,000,000 of liability insurance or more. You should be listed with the Better Business Bureau and the state’s Department of Transportation. The movers should be trained and not just thrown on a truck. Also, you have to employ a sales staff. In our case, we have 6 retail locations so we have to have people to man the stores. We have a storage facility which requires a huge amount of space. When getting the larger jobs we must have onsite estimators to come out and see exactly what’s going to be moved and see the job at hand.

We have a high level of standards from our movers and sales staff. So we seek employees that take themselves and their work serious. We maintain a high level of ethics and our employees must also portray that.

3. It sounds like the moving business is similar to sales, since every move is a closed deal. How do you optimize your resources in order to close as many deals as possible?

First, we never overbook. There are some companies that plan for cancellations and they overbook. We find that more often than not our clients do not cancel unless it has something to do with a closing or scheduling elevators, etc. We optimize sales and closing be maintaining an aggressive sales force who has confidence in what they sale so it makes life simple and easy for them. We have software that make it easy to compile a customer’s basic information and interpret their situation to give them an estimate. Having 6 locations makes it easy if a person prefers to deal face-to-face when they do business.

4. For someone who is moving what are the do's and don'ts?

The most important thing a person can do is their homework. I can not stress this more. It goes hand in hand that if a company has a lot of complaints at the Better Business Bureau, Angie’s List, the state’s Department of Transportation or City Search then this may be a testament of their quality of service. Read your contract thoroughly and make sure you understand everything that is involved and what is expected.

5. Describe the process for someone who is utilizing the services of your company. Are their estimates involved? How do you determine those estimates?

There are two ways to get an estimate. It can be over the phone or onsite. We typically give over the phone estimates when it is a small job, no packing, or we have moved the customer before and they did not acquire many new things. When onsite estimates are needed it is usually by request, the customer has a large apartment or house, or they require full packing or a complicated move. In this case we go out and give a free estimate to see exactly what is going to take to complete the job. The estimates in both cases are determined by the amount of items the customer has, where they’re moving to, and exactly what they want packed (if anything).

6. How have fuel costs impacted your business?

Fuel has been a great impact on our business. We did not want to raise our prices for local moves. However, we did a slight price increase for moves that required 6 hours or more of total driving.

7. It seems like everyone is always is moving. Is this a recession proof business?

I think whenever you deal in a business that is more a luxury or just makes your life easier it isn’t totally recession proof. Being a full-service mover is no different. Because we cater to a client that wants more than just two men and a truck it definitely hurts a little when the economy is bad. However, I look at it like this, when the economy is bad people can’t afford the current place and need to move, and when the economy is good people can afford to live in a better place so they move. This business is moving, but it’s not going anyway.

8. What is the difference between moving for a commercial and residential customer?

There is a huge difference. We almost 95% of the time send an onsite estimator for commercial. (Unless it is extremely small and the client is very detailed over the phone). The commercial estimator must be very seasoned in his knowledge as well as the crews we send to complete the move. Often there are cubicles that need disassembled and wall pieces. The biggest difference is the furniture type. There are no rules in commercial. We’ve moved factories, art dealers, office spaces, and various business types. The typical residential move is not as complicated.

9. What is the turnover for your trucks? How often do you replace them?

We have trucks we’ve had since inception of the company and we have brand new trucks. We try to use the older trucks for the smaller less complicated local jobs. The newer trucks we use for larger jobs and more complex situations. We’ve replaced many trucks that are out dated so most our fleet is new.

Thank you Charles for your time.

Thursday, March 20, 2008

Act Your Age

If I am ready to throwdown with an old man, then you know I am just getting started.

Yesterday I was at my local Duane Reade taking care of some business. I was standing in front of the counter processing my transaction when this old man walked up to me and kicked a basket that was on the floor into my leg. It didn’t hurt me but it startled me and I responded by saying WTF very loudly. The old man proceeded to walk past me and ignore my demands to know what the f**k was the matter with him. You see, I was really pissed because it was completely intentional and obnoxious what he did and he confirmed my suspicions by not stopping to apologize. There was no reason for this man to act this way and I was not letting him off that easy.

I muttered under my breath that he was refuse from holding area for double wides and found that he may have been old but he had good hearing. He stopped turned around and in his best Clint Eastwood impression said

“You better watch what you say.”

I don’t know about you all when I hear that expression, I take that as a very subtle yet powerful threat. All he had to do was add the word “boy” and it would have been a scene straight out of Mississippi Burning. That really pissed me off. The f**king gall this piece of s**t had to even try to intimidate me after being the cause of this turmoil.

With my arms raised to shoulder height and my palms faced up I yelled out to him
“What are you going to do?”
When you translate my words and body language, I basically said “Please f**k with me. I dare you.”

Realizing that I called his bluff he turned around cursing under his breath and left.

Yeah, I know. I am really brave for taking on an octogenarian but here’s the thing. This was an old white man dressed impeccably in a suit, overcoat and hat. He practically walked out of a Brooks Brothers store. Call me a classist but these aspects identified him as a person of proper breeding and education. In other words this douchebag should know better than to act in that fashion.

It doesn't matter whether you are he was white, black, asian or latino. When you come from that type of background, you must hold yourself to a higher standard.

I suspect this man is harboring a tremendous amount of resentment towards the world. In the past couple of months he probably has seen his net worth been reduced to shambles. Maybe his house in Greenwich is being foreclosed on. He feels the need to lash out at someone, so he does it at someone he perceives as weaker, which was a young whipper snapper at the Duane Reade.

I have nothing against the elderly. In fact I was raised to respect them and I know that one day I will be joining their ranks. I just hope though that I will at least have the dignity and self respect that reflect my years and not that of someone who feels robbed, like this man.

If there was a funny part of that incident it was that, I did not have a bonus card. Luckily there was an African American gentleman who was more than happy to provide his and help me. I suspect the reason why he went out of his way to help me was that he witnessed what happened.

Tuesday, March 18, 2008

This time its personal

I'm not a cop tonight, Rog. This is personal.

Martin Riggs-Lethal Weapon 2

Lisa Prevost discusses the higher rate of lowball offers that are presented by buyers. Here are some points of the article.

James and Valentina Sbarra fit the last description, and they are relieved to be able to call themselves successful lowballers. Any nervousness they felt in making a stingy offer — lowballing is typically defined as offering less than 90 percent of a house’s asking price — fell away the minute they struck a deal on their two-bedroom raised ranch in Pawling, N.Y., in Dutchess County.
“We kind of took a gamble,” said Mr. Sbarra, a bank manager in Mount Kisco, N.Y. “But it worked out for us.”

Throughout the region, buyers of all stripes are feeling similarly empowered to bid low and keep their hopes high. The practice still fails more often than not, in that buyers are unlikely to get themselves a steal. But many sellers are swallowing hard and negotiating, because lowballing has become so common that, for better or worse, it’s part of the new norm in buying or selling a house.
The Sbarras gambled by offering $287,000 for their house, which was listed at a reasonable $329,000. In doing so, they risked angering the owner and ruining their prospects for negotiation.

“I think it’s worth $320, $325, and I gave them my opinion,” said Peter Bell, an owner of Balch Buyer’s Realty in Mamaroneck, N.Y., an agency that represents only buyers. “But they said, ‘We don’t want to go too high.’ So I said, ‘O.K., let me make the offer as strong as I can, and we’ll hope for the best.’ ”

Much to Mr. Bell’s delight, the owner responded with a counteroffer of $315,000, and the parties went back and forth until settling on a price of $300,000, the amount the Sbarras had set as their cutoff. The couple moved in last month.

“We would have been disappointed if it hadn’t worked out,” Mr. Sbarra said. “But it was a situation where we felt buyers had the upper hand.”

The Sbarra could pull this off since this is Mt. Kisco. From my experience with Westchester, this is not the primary location where families want to locate. Not that there is anything wrong with Mt. Kisco but there are far more affluent areas in Westchester. This worked in favor of the seller since they probably made a profit from the sale since they probably bought their home for cheap in the first place, albeit smaller than they would like, but I would be surprised if they did not make their nut.

Now here’s where it gets tricky particularly for the affluent class.

“I have one seller who doesn’t want to talk to me because I brought him an offer $200,000 below the asking price” of $1.4 million, said Attilio Adamo, the owner and broker at Prudential Adamo Realty, in Ridgefield, N.J. “Some sellers get insulted and hold a grudge."

Their ire is understandable, said Lois A. Vitt, a financial sociologist and the director of the Institute for Socio-Financial Studies in Middleburg, Va. “Some sellers personify their home, believing the value is all about them, not just about the sticks and bricks,” she said. “They might have lived and loved the home, and a lowball offer can be seen as a very personal insult.”

That is particularly true in high-powered, high-value communities like Scarsdale and Greenwich, Conn., where location and status help prop up prices. Buyers making lowball offers in Greenwich are not getting what they want because sellers refuse to take such offers seriously, said Max Wiesen, a sales associate with Coldwell Banker.
Clients of his recently made a cash offer of $4.6 million for a property listed in the mid-$5-million range. Although it was low, the offer was reasonable, Mr. Wiesen said, given that the house had some issues and no other house on the street had sold at the price these sellers were after. The owners’ response was a counteroffer barely distinguishable from their asking price.

“These people in Greenwich are not in the position other people in America are in,” Mr. Wiesen said. “These are wealthy people who can sit on their houses, and they do.”

This is where Mr. Wiesen is wrong. A lot of these affluent people make their money in finance; and things are not rosy in that arena right now. Right now cash is king. Banks have tightened up their lending standards so people with lots of liquidity are going to ones in the driver's seat. If they can’t the mortgage that they want, they sure as hell as are not going to commit more than they need to. That reality has not caught up with these affluent areas. But when it does it is going to be rather painful.

Though deals can be found if a buyer has enough nerve and stamina to put up with repeated refusals, agents advise that lowballing is a bad idea when the buyer really, really wants the house. “You take your chances when you do it,” said Frank Ledermann, an associate broker in the Scarsdale office of Houlihan Lawrence. “It’s America — you can bid whatever you want. But you may not get what you want.”

No one is going to get what they want. Particularly for the sellers. The sellers that do not dump their properties now are going to enter a world of hurt. It will be especially painful since their egos are so heavily attached to their properties. In fact I can see the coining of a new term, Seller's rage, where seller's start to jump their brokers. You think I am kidding? We are already having riots over housing vouchers. What makes you think a rich person won't take a 9 Iron to a buyer with a low ball offer?

A lot of these sellers moved to these locations for the schools and now that the kids have graduated, they are entering their golden years, looking to move elsewhere. They do not have the commodity of waiting for the next cycle.

As I have stated in a previous entry

The suburbs are a great deal, but I think are about to get much better for buyers. I predict in the next couple of months there were will a ton of coverage on these affluent areas crashing and burning just like the rest of the country. Although this is a process that has been occurring for quite sometime, I believe that with the current state of the economy and how badly the finance industry is doing I think it will get really atrocious for places like Scarsdale and Greenwich. More on that in the next coming months.

Sunday, March 16, 2008

Spit and Bailing wire

This picture of Kelly Kreth has nothing to do with this entry. But I put it up since she demanded it for putting up Julia's picture. There will another in the future.

The big news of last week besides Eliot Spizter stepping down and Julia Allison’s marshmallow fetish was Bear Stearns emergency infusion of cash from JP Morgan Chase and the Fed. There were rumors that Bear Stearns was actually about to go under which of course Bear Stearns denied. It appears those rumors were closer to the truth than they liked.

We are entering an entirely different theater, which requires a new set of firing solutions. It appears the Fed is very well aware of the situation which is illustrated by their actions.

According to the New York Times.

On Friday, the Federal Reserve seemed to toss out the rule book altogether when it assumed the role of white knight, temporarily bailing out Bear Stearns, one of Wall Street’s biggest firms, with a short-term loan to help avoid a collapse that might send other dominoes falling.

That move came just days after the Fed announced a $200 billion lending program for investment banks and a $100 billion credit line for banks and thrifts. In a move that would have been unthinkable until recently, the central bank agreed to accept potentially risky mortgage-backed securities as collateral.

Gretchen Morgenson puts in her two cents about why this is good and bad.

“Why not set an example of Bear Stearns, the guys who have this record of dog-eat-dog, we’re brass knuckles, we’re tough?” asked William A. Fleckenstein, president of Fleckenstein Capital in Issaquah, Wash., and co-author with Fred Sheehan of “Greenspan’s Bubbles: The Age of Ignorance at the Federal Reserve.” “This is the perfect time to set an example, but they are not interested in setting an example. We are Bailout Nation.”

And so we are. After years of never allowing any of our financial institutions to fail, they have become so enormous that nobody will be allowed to sink beneath the waves. Otherwise, a tsunami would swamp the hedge funds, banks and other brokerage firms that remain afloat.

If Bear Stearns failed, for example, it would result in a wholesale dumping of mortgage securities and other assets onto a market that is frozen and where buyers are in hiding. This fire sale would force surviving institutions carrying the same types of securities on their books to mark down their positions, generating more margin calls and creating more failures.

Remember that story I told you about Rupert Murdoch when back in the 80’s he was so over leveraged that not only could he not make his payments but had to actually has to ask for more money? The banks were rather unhappy about the situation and one bank was about to pull the plug that would have sent everything in a freefall.

It is the same situation but different players. The Fed realizes that the survival of the economy hinges on these financial institutions. The general consensus is that these entities need to accept the consequences for their actions. Unfortunately, those consequences would probably affect us all.

As Gretchen Morgensen puts it

HERE is the bind the Fed is in: Like the boy who puts his finger in the dike to keep sea water from pouring in, the Fed finds that new leaks keep emerging.
Regulators must do whatever they can to keep the markets open and operating, and much of that relies upon the confidence of investors. But by offering to backstop firms like Bear, who were the very architects of their own — and the market’s — current problems, overseers like the Fed undermine a little bit more of that confidence.
Another worry? How many well-capitalized institutions remain at the ready to take over those firms that may encounter turbulence in the future? Banks just do not have the capital that is needed to rescue troubled firms. That will leave the taxpayer, alas. As usual.

This morning Treasury Secretary Henry Paulson was on This Week with George Stephanopolous basically stating the party line which was the following:

The government is prepared to do what it takes" to ease turmoil in the financial system and minimize any damage to the national economy, Paulson said during a series of broadcast interviews. The Fed's intervention "was not a difficult decision. It was the right decision."

"Well, our financial institutions, our banks and investments banks are very strong," he said. "And I'm convinced that they're going to come out of this situation very strong."

The financial system, he said, is "more fragile than we would like right now."

My impression of Mr. Paulson was that he was extremely calm in fact too calm for my taste. It appears that he was making twice the effort to emote that everything was cool as Pulp Fiction. Bush has done the same thing, trying to reassure the people that we are going to be fine.

This is an election year, the current administration is on its farewell tour and they have more than enough problems to deal with. Which means they have nothing to lose and they do not want to add more to their workload. So they are going to slap on as many bandages on the economy as they can. Of course these are temporary fixes because the wounds that have been inflicted on the economy are not cuts and bruises but are actually sucking chest wounds. The possibility also looms that these solutions may make things worse down the road.

But guess what? In 9 months, it is going to be someone else’s problem. Remember the last election? When Greenspan was running things, did you see him do anything out of the ordinary? Hell’s no. He was going to maintain the status quo till the dust settled and he saw who was going to be the last man standing.

I suspect Bernanke is following the same game plan. This is simply a stopgap measure. For all we know Bear Stearns got this infusion not to rebuild and restructure itself but to give them time to put their affairs in order before heading to the hospice.

It appears that Bear Stearns shall live another day. Under the banner of JP Morgan Chase and with a more than a little help from Uncle Sugar.

Federal Reserve Acts to Rescue U.S. Financial Markets

Hoping to stabilize financial markets, the Fed approved a $30 billion loan for the takeover of Bear Stearns and announced a new lending tool for major investment firms.

JPMorgan Chase Buying Bear Stearns for $2 a Share

In the deal crafted on Sunday for Bear Stearns, JPMorgan Chase agreed to pay a mere $2 a share for Bear — less than one-tenth the firm’s market price on Friday. As part of the deal, JPMorgan and the Federal Reserve will guarantee the enormous trading obligations of the troubled firm, which was driven to the brink of bankruptcy by what amounted to a bank run.

What a bargain!

Saturday, March 15, 2008


3 people are dead after a crane collapsed at 2:15 pm today. According to reports the crane fell back onto building on 305 east 50th street. Go to Gothamist for further details or turn on NY1.

What is really f**ked about this situation is that according to witnesses, alot of people were saying that there was something odd with the crane and it looked like it would fall down. Even one guy who lived in the area stated that when he heard the sound of the collapse he did not bother going out to look because he knew what it was.





Remember, there is a lot of dust and debris flying around so it might be best to avoid the area, also to to avoid getting in the way of the first responders.

Thursday, March 13, 2008

Admit it. You wish those were your marhsmallows.

As many of you do, I was perusing Gawker and came across their entry regarding worlds of Julia Allison and Jakob Lodwick colliding. Just like the rest of you, I began to peruse Julia's photostream and came across various coquettish poses that bordered on narcissism when I came across this one titled Marshmallow Love.

All sorts of naughty thoughts started to swirl in my mind. Then I am reminded myself that I am a Kelly Kreth man. I have nothing against Julia Allison, although she reminds me of the girls I have known in my life who would often get what they wanted by manipulating their body language in a fraternizing manner and wearing tight jeans. Ahhh, high school, how I have grown to hate you. Yes. Julia Allison is a media trollop. But she is a damn good one and she knows how to work it.

While we are on the subject of bad taste, I definitely have to throw in this Eliot Spitzer joke I got from Peter David.

It is something that Clayton Bigsby would come up with.

This just in...(tasteless joke warning)

New York governor Eliot Spitzer has tendered his resignation due to his involvement in a prostitution ring. David Paterson, the lieutenant governor, will assume office.

When Paterson, who is legally blind, was asked how he felt being the first Black governor of New York, Paterson was quoted as saying, "Wait...I'm Black? Seriously? Are you putting me on?" Paterson professed to be completely surprised by the revelation, and when reporters expressed incredulity that he was unaware of his skin color, Paterson said, "What part of 'legally blind' is unclear?"


Tuesday, March 11, 2008

You are a f**king idiot

He really blew it.

From ABC News

In a interview two years ago, Spitzer, then-attorney general, told ABC News he had some advice for people who break the law. "Never talk when you can nod, and never nod when you can wink, and never write an e-mail because it's death. You're giving prosecutors all the evidence we need," he said.

Spitzer should have followed his own advice. Now he is front page news on the verge of losing his Governorship and possibly being prosecuted for a federal crime.

Spitzer’s f**k up not only impacts his own career but the following parties.

1.Wall Street. According to Dealbreaker,
Wall Street was shocked and overjoyed at the fall of this boogeyman that had been the source of their nightmares. However they shouldn’t be cheering for long.

However, I think their joy will be short lived.

Some bankers noted that Mr Spitzer’s downfall had come at time when he had been co-operating with some of his former enemies on Wall Street to try to bring atability to the troubled municipal bond sector.

Harnessing his widespread contacts from his time as attorney-general, he had been making numerous phone calls to chief executives of top banks such as Citigroup, Credit Suisse and UBS in behind-the-scenes efforts to secure fresh capital to bail out bond insurer Ambac.

Eric Dinallo, the New York insurance regulator who was appointed by Mr Spitzer and who has been working extremely closely with him on the Ambac rescue, did not know about the allegations until he saw the news coverage on Monday, people working with Mr Dinallo said.

Spitzer was probably doing everything he could to bring stability to the financial sector of New York and making every effort to help New York ride out the recession. Will Lt Governor Patterson be able to hold onto the reins of the downturn? He sure as hell does not have Spitzer's power base. To make matters more interesting, Republican Frank Bruno will be the Lt Governor to take Patterson's spot. I am sure that will be a match made in heaven. This will definitely be a tumultuous 3 years in Albany.

2. Hilary Rodham Clinton. This could not come at a worse time for her. Spitzer is a huge Clinton supporter, a super delegate and was on the short list for vice presidential candidates. Apparently Clinton has made every effort to distance herself from him.since the news broker. No surprise there. The last sex scandal that she was smacked in the head with nearly ended up her leaving the White House early.

3. New York State. Spitzer was considered to be a muckraker of sorts and was in the process of implementing an ambitious platform to reform all that was wrong with New York. For some he was a light of hope, but now it has all become so dark. Are we going to go back to the status quo? Will it be business as usual and all of the changes that Spitzer be considered just a historical footnote?

4. Perhaps the biggest losers are Spitzer's family. Silda Wall Spitzer will now be joining the wives of disgraced governors club consisting of Dina Matos McGreevey of New Jersey and Patty Rowland of Connecticut. Spitzer's daughters are going to be forever marred by their Dad's indiscretions. No matter what they accomplish in life, the actions of their father will always be mentioned in the same breath. They don't deserve this. They are the true innocent bystanders in this mess.

Unlike Kelly Kreth, I am not a sex or relationship expert. However from reading an enormous amount of Sidney Sheldon novels and being raised on Aaron Spelling shows, I feel I know a thing or two about the extra curricular activities that some married men participate in. And if Spitzer had just followed the proper protocols, he would not have created this FUBAR.

Let me get this clear. I am not condoning adultery and nor am I judging anyone. I am actually a big supporter of marriage. However, I am a realist. We all have a tendency of straying and sometimes some of us indulge in that tendency. But I do believe there is a proper way of satisfying those urges for men in public office.

Men of power having an affair is as old as time. Franklin Delanor Roosevelt's secretary Lucy Page Mercer Rutherfurd was believed to have been his mistress. John and Robert Kennedy were known to have passed around Marylin Monroe. However unlike our once esteemed and soon to ex governor, these parties exercised a certain level of discretion. In other words they did not leave any paper trails or they employed problem solvers to cover their tracks. That is why we can only speculate on their dalliances after these men have passed onto history because there is no hard evidence.

The way powerful men conduct affairs with other women relies on good old fashion networking. They find someone who they are attracted to in their inner circle and the two parties have a meeting of the minds and presto they have themselves a mistress. The advantages of a qualified mistress is someone that can be at their beck and call. However there is a risk that the mistress will turn on them. How do you think Dick Morris and Frank Gifford got caught with their pants down? Those women were not from their inner circle. Another reason why they choose someone from their inner circle because this person has as much to lose if their arrangement is exposed. This person can also collaborate on a denial if they are exposed.

However if a man of power is not interested in something long term then they should utilize the services of professional ladies of the night. However the last place you want to go is a website that actually advertises call girls and actually make payments from a bank account or use a credit card. I mean for f**k’s sake, doesn’t Spitzer know about people getting busted on craigslist for trying to buy services of experts of carnal knowledge? Did he not learn anything from busting people for these types of crimes? I can't believe he went to law school let alone Harvard.

Powerful men rely on their network to vouch for the discretion and quality of these services. These services only take cash or compensated in ways that do not raise suspicion and they only service a certain type of clientèle.

All Spitzer had to do was follow these steps and he would have been home free.
Better yet, he should have had a sit down with his lovely wife and given her the rundown about his needs. Perhaps a quick run to Babeland and would have maintained their marital bliss. Maybe Spitzer was a monster in bed and his wife could barely keep up with his demands which involved a slab of bacon and three beach balls. Or maybe she cut him off because he was being a complete douche to her. Who knows? None of my business. But even if he did not want to put in the effort of finding a mistress or making the proper arrangements for his infidelities, then he should have just gone to Fleshbot WARNING NSFW, told his wife and kids to clear out of the house for the day and break out a case of Jergens. I am sure he would not be in this position if he had just indulged in a hearty session of private self gratification.

So now we wait for the inevitable. Rumor is that he is holding off to get a deal because he committed a federal crime by transporting a call girl over state lines. Whatever he's up to, just do it fast. Just leave by doing the right thing.

Friday, March 07, 2008

Well, mortgage defaults have reached an all time high

The Mortgage Bankers Association reported Thursday that the number of loans past due or in foreclosure jumped to 7.9 percent, from 7.3 percent at the end of September and 6.1 percent in December 2006. Before the third quarter, the rate had never risen past 7 percent since the survey began in 1979.

Recently the NYT published an article about the backlash against aid for people in foreclosures.

I have to admit they present some compelling arguments.

Seattle, which has nowhere near the kind of foreclosure problem other cities have, began a modest program last month offering loans of up to $5,000 to help a few dozen homeowners avoid losing their homes.Not only are people in Seattle relatively prosperous, but they have a reputation for being nice, too. Yet no sooner had Mayor Greg Nickels announced the program than opposition surfaced.
“Just can’t agree with using taxpayer dollars to bail out private homeowners, no matter how the mayor tries to justify it,” read a complaint posted on the “Soundoff” section of The Seattle Post-Intelligencer’s Web site.

Ryan Ellis, the tax policy director for Americans for Tax Reform, a conservative antitax group, said his group opposed efforts by the Bush administration to nudge banks and lenders into restructuring some loans, much less direct government loans to homeowners facing foreclosure.
“You can call it community reinvestment, neighborhood protection, whatever you want,” Mr. Ellis said, “but if you’re taking away the downside risk of a loan, you’re bailing them out.”

I understand why all these municipalities are handing out aid because foreclosures are just all around bad for a community since abandoned houses lower property values and it also makes municipalities vulnerable to forces like crime and especially corporate America. I believe that you will see the destinies of towns taken over by other parties because they have the cash to do as they please.

But I think foreclosure aid is a complete utter waste of time and money. These homeowners don’t want to be saved. They have done the math and even if they keep their homes, there is no way in hell in their lifetimes they will able to recoup the same level of equity they did in the past 5 years. Even if they are offered workouts by their lenders, there is no incentive to take them because the house is going to be worth less money than what they are paying for.

Of course lenders are freaking out because the last thing they want to deal with is become landlords. Usually what happens is that the distressed property community jumps in takes those properties from the lenders for a very low price but from the amount of inventory that is piling up it appears there are not alot of takers.

I conclude it is due to the following reasons.

1.The investors are waiting for the market to really bottom out, to the point that
the lenders are so exasperated that they just toss the keys over to them.
2.There is no money to invest or at least investors do not want to touch anything
related to real estate.
3.It’s all garbage. Whatever is out there right now is not worth buying
4.The process of distressed property investment is to be able to get something cheap
and to sell it off for a profit to another party. In this current environment it is
very difficult to find those parties.

Barry of the Big Picture had this to say.

Thursday, March 06, 2008 | 10:30 AM

The hallucinogenic spin-meisters over at the National Association of Realtors are once again, misstating what their own data indicates:

Flat Existing-Home Sales Likely Before Gradual Recovery
The volume of existing-home sales is expected to hold steady through late spring, with a gradual recovery during the second half of the year as the mortgage situation improves in high-cost areas, according to the latest forecast by the National Association of Realtors. Lawrence Yun, NAR chief economist, said many buyers have been waiting for higher mortgage loan limits. “The higher loan limits for both FHA and conventional loans will increase consumer choice and provide greater access to lower interest rate mortgages in high-cost regions,” he said. “Therefore, a notable rise in home sales can be anticipated in the second half of the year."
This statement reflects a combination of wishful thinking and factual misstatements. Let's review the specifics.

First, the Pending Home Sales Index fell 19.6% from year ago levels. This is hardly a "flat" number, as described by their PR release. This is significant, as the NAR itself notes in the footnotes to their The Pending Home Sales Index:
"There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons."

Hence, the data that matters most is not the change from December to January, filled as it is with seasonal anomalies, but rather, the January 2007 to January 2008 comparison. That showed almost a fifth lower than the prior year's index.
When we consider the rest of the data that's out there, its apparent that stabilization is not the correct word:

We are near stabilization in the housing market as we are near to landing astronauts on Mars. It will happen eventually but not for a very long time.

Thursday, March 06, 2008

Pain don't hurt

Besides Donnie Darko, two other moments of brilliance in Patrick Swayze's career.

Patrick Swayze and Chris Farley

Road House

We are all praying for you buddy.

Tuesday, March 04, 2008

GREENLIGHT: Grand Central is rolling

Grand Central is now operational. You may proceed to your commuter destinations. I did a quick walk through and saw a NY1 journalist/Camera man running around doing interviews. It is still packed but moving.

Breaking News: Building Collapse Grand Central Shutdown

A building collapsed in East Harlem causing all service to be suspended from in and out Grand Central. For further details go to Curbed.

After hearing what happened, I walked through Grand Central and it has become the impromptu staging area for stranded commuters. People are standing around with their cell phones trying to make other arrangements, some are staring at the train schedule screens. At the information booth area there is a MTA employee stoically answering the same questions over and over again. Service has been suspended and we do not know when it will start up again.

More later.

Monday, March 03, 2008

And you give me a paine Elaine

Actually she doesn’t. I’m just making a reference to the Stella Pevsner book.

Elaine Clayman is considered to be one of the big guns of not only of Brown Harris Stevens but also of her profession. From what I can recall, at one point she was part of a select group that had listings worth the GNP of a small country. As a titan of the industry, she does not just bring home the bacon; she brings the whole f**king IHOP. Among the benefits of her success is a rumored ranch in Latin America and a powerful presence where even the powers that be of Brown Harris walk very softly around her.

She also has her own group, which is not surprisingly called the Elaine Clayman group and includes her daughter, the rather attractive Justine. Ms. Clayman’s is so big that she even has her own marketing team.

Brown Harris Stevens is considered to one of the premiere white shoe firms. One of their biggest deals was the Rupert Murdoch purchase of his apartment at 834 5th. Brown Harris Stevens prides itself on this image of respectability and prestige. Anything that denotes otherwise isn’t just frowned upon. It is given a pair cement shoes and tossed into the east river.
At one point they enforced a policy prohibiting craigslist which obviously they have changed.
And it was rumored at one point to have been one of the parties that were approached to purchase Citi-Habitats before they were sold off to Corcoran. Allegedly Brown Harris Stevens outright refused to consider it due to the, how should I put it, the difference in broker culture.

Which is the reason why I was completely baffled when Curbed published the Clayman Group ad proclaiming

Chelsea Penthouse Foreclosure Sale.

If you go to the ad now, they have completely changed it removing any mention of the word foreclosure and in fact the entire ad has been changed in a more positive tone.

How this came to light, I do not know. Someone like Elaine Claymn and Brown Harris Stevens would never allow themselves to be associated with the word foreclosure. Distressed maybe or motivated seller but not foreclosure.

Why did this occur? There are two possibilities.

1.Somebody f**ked up.
2.The Manhattan market is more f**ked than we are led to believe

The Grunt is going to go for door number 2. When it comes to marketing, there are fubars, I know this from my personal experience. But there are checks and balances in place to prevent that type of douchebaggery.

From the Curbed comments, it appears this listing has been on the market longer than Britney Spears has been without panties. And it might not be the only one to join the ranks of the foreclosed.

Wall Street is getting its ass kicked in on a daily basis, the economy is getting pummeled and PODUS is in denial about a recession which is the same thing his Dad almost 20 years ago. That being said, it is not a matter if but when Manhattan will fall in line with the nation’s housing market.