Property Grunt

Wednesday, December 31, 2008

The last day of 2008

All we can do is watch.

Housing prices dropped again in October.

Home Prices Fell at Their Sharpest Pace in October

Yet even the experts believe that New York City will ride out the storm in style.

New York, New York: America’s Resilient City

Since 2007 when the entire credit market began to crumble, I began the alert that we were going to really get it.

From bad to oh we are so f**ked

Up and down

If you look at the comment sections, I got a lot flack for what I wrote. And now we are on the lastday of 2008 and it has been a hellacious year. Do I take any satisfaction that my words of doom have rung somewhat true? F**k no. In fact I am just as baffled as everyone else on how bad things have gotten.

I realize there was going to be a huge imbalance in the market, but I figured the stock market would make its routine bull run while the real estate market would tank but slowly stabilize with the distressed property investors. Now the experts are telling us that we have only begun to experience this world of hurt and 2009 will have plenty pain for everyone.

It is an anguishing situation because despite the actions that have been taken, it will be quite awhile before any semblance of normalcy returns to our economy.

So what do we do? We adapt, survive and watch the show.

Happy New Year.

Tuesday, December 30, 2008

Regarding Eartha

It appears that everyone is doing an Earth Kitt tribute so I might as well throw my hand in since I actually met her.

11 years ago when I was working on a media production, a very unpleasant producer, who I will call the gapping maw or gm for short was able to land her for a segment. I call her the gaping maw because whether it was food or gossip she could never shut her mouth. The gaping maw made a big deal about Eartha Kitt and put the fear of god in all of us about properly treating Eartha Kitt.

In all honesty I was quite concerned about my welfare since she had certain requirements that needed to be fulfilled. One of them was that she had to have her own private green room. My primary job was to play bouncer and prevent anyone that was not part of her entourage from entering the room.

It proved nerve racking at one point when a producer and a colleague who was talent jokingly attempted to enter the room. But other than that, the day was rather pleasant.

Miss Kitt, she was exactly what everyone said about her. Professional, polite , gregarious and really strong. I am being serious. She was very strong. The gaping maw was having problems opening a door and despite outweighing Eartha Kitt by about 300 pounds. Eartha grabbed the handle and popped that sucker open with a simple pull.

I remember her also her also being very comfortable with herself. Even though she wore a wig, she still freely walked around the studios without it and instead had a small head wrap that was around her beautiful hair and was wearing what I can only describe as a simple dancer's warm up outfit.

Even though she lived in Scarsdale and had a life that most people envy, Eartha Kitt did not any project pretentious airs about herself.

My lasting impression of her was a woman who exuded class, respectability, talent and yet possessed a very strong sense of humility.

Purr away in heaven Cat Woman.

Saturday, December 27, 2008

The Scorpion and the Frog

Know the nature of what you are dealing with or you could be stung.

The New York Times had an amusing article regarding the M60 bus that goes straight to La Guardia. Unsurprisingly, the bus becomes the terror dome during the holidays.

Catching a Full-Up Plane? Take This Overstuffed Bus

Passengers on the M60 bus who had already been forced to stand were pressed against the doors. Others, trapped by tall suitcases, could not get up from their seats. Two dozen people with yet more bags tried to board, but a wave of exiting riders, shouting loudly, pushed them right back off. The same scene was replayed at the next stop, Third Avenue.

“They pack us in like cattle,” said Clay Crawford, 40, who lives in Harlem and was commuting to his job as a security guard in Queens. “Who wants this?”

Who wants to deal with this? People who are too cheap or unable to spend $12 on the New York Airport Service. But just because you take frugal measures for airport travel does not mean you have to suffer. If you follow these simple principles it will increase the chance of having a stress free arrival to the airport.

1. Prepare in advance

Because of my tendency to procrastinate, I often begin my travel preparations at least a week in advance. That includes packing and airport travel. It never fails that the night before I need something for the trip and I am running around like a maniac to take care of it. But at least my bags are packed.

2. Choose your airport travel options wisely and adapt to them.

When it comes to airports, I was always taught to arrive at least an hour before the flight leaves which means adding another hour for travel time. Traveling is not an exact science. Flights get canceled or delayed. They also might be overbooked and even if you bought your ticket in advance, you might be bumped off if you do not arrive early enough. When traveling to the airport it is best to have more time than less.

I often spend the 12 bucks for the airport bus service because of the convenience. The schedule is simple to follow and has a wide variety of options to choose that can fit in my schedule and unlike the M60 it does not make additional stops that could add to delays to my schedule. It is a straight shot to JFK and the driver can help me if I have any questions.

I have taken the E train Sutphin Boulevard which connects to the Air Train. It is actually quite affordable and easy to use. However because of the destination and the erratic nature of the subway I would leave very early and would often find myself waiting at the gate for at least an hour before boarding.

If I were to take the M60, I would leave not two hours but 5 hours in advance. When you have a service or product that is dirt cheap, in scarce supply and in demand then it is always going to be mobbed especially during the holidays.

3. Just because you get the airport on time does not mean you will be.

As I have stated before, travel is not an exact science and Murphy's law often stops by to see you off. Even after checking in and getting to the gate, I do not sleep, rest or engage in any type of behavior that would take away my full attention tfrom the environment. I listen to the announcements made on the PA system and I observe my surroundings very carefully. If I do not see a crowd of people at my gate at about 30 minutes before boarding, I am going to wonder why. Maybe the gates have been switched and I have to go somewhere else. If have to move, I want to be able to it quickly and efficiently.

It also does not hurt to know where the emergency exits are. S**t happens.

4. Check online for everything.

I have learned in the past to check online to confirm what gate I will be leaving from and check my flight status and I always use online map services to estimate my travel time to the airport. This gives me a better idea of when to leave and determine my choices if my flight has been delayed or canceled.

I have also expanded my online research on what gate the plane will be using upon arrival and looking at the airport map to determine the logistics of leaving the airport. Last summer I had a nightmare when arriving to San Francisco. I was unable to find the area where I was to be picked up and the woman at the information desk obviously did not understand the description of her job because she was completely unhelpful.

If you disobey any of my principles, this is what is likely to occur.

Vikaas Sharma, a Columbia University student who was trying to wiggle a blue suitcase out of the way, boarded the M60 at 2 p.m. on Tuesday to catch a 3:45 p.m. flight on his way to San Francisco, where he grew up. But the bus did not arrive at La Guardia until 4 p.m., so he missed the flight, which turned out to be the last one available until Christmas Day — leading to the first Christmas Eve of his 20 years that he spent without his family.

As I have stated before regarding the use of the M60 bus, he should have left 5 hours before check in. If he had splurged and taken the New York Airport bus he should have been at the gate at 2pm. This is his fault not the bus. Even tourists know how f**ked up the bus and subway systems are, Vikaas, being a Columbia student and has lived in the city, should known that the public transportation system can become a scorpion very quickly.

There are probably those of who have read this article who are a bit shocked that an Ivy Leaguer would make such a miscalculation. I am not. Which needs leads me to my next principle which applies more to life than travel.

Just because someone has an Ivy League degree does not meant they are smarter than you or more successful than you.

When I was younger I was always overly impressed perhaps intimidated by people with Ivy League pedigrees. They were more talented, intelligent and destined for greater things that us lesser mortals could never comprehend. And a lot of these kids actually believed that and acted like the exalted ones. in other words they were a$$holes. But honestly, I am not impressed with the way their lives have turned out.

I know of one person who despite having a two degrees, one from an Ivy League school and working at a good job is still unable to cobble together a down payment for an apartment. I know one person who has two degrees from the Ivies and founded several start ups which failed. This person at one point was on the partner track at a very prestigious law firm. He could not hack it and works in an industry that is quite lucrative however very unstable. I know two couples who between them probably spent a fortune on their Ivy League educations. Despite having successful careers, one couple still does not have the money to buy a home, the other couple bought awhile ago, but their careers are in question due to the current economy. Speaking of Columbia, I know of one real estate developer who tells stories of fresh graduates from the Columbia real estate program who show up for interviews assuming they have been hired because they graduated from Columbia.

Mind you, I am no Jedi Knight when it comes to success but it is a sobering realization to see what has happened to these people.

By no means am I showing disrespect for the Ivy Leagues. If I had a shot at Harvard, I would run though hell and high water to attend that school. Having an Ivy League degree opens doors however it does not guarantee success and happiness in life.

Thursday, December 25, 2008

Where is my golden notepad?

Web of Spiderman #6

Charles Anderson (in thought): Proud of yourself, Anderson?
Spider-Man: Proud of yourself, Anderson?
Charles Anderson: Spider-Man!
Spider-Man: Yeah, that's right. You know -- the guy you shot at for trying to save some innocent lives before -- Yeah, THAT Spider-Man. Y'know, it's funny. A few minutes ago, I would've happily chased ol' tubby for you.. to finally nail him for a convictable crime: stealing those typewriters. Only, it's NOT a crime now, is it? It's government sanctioned! He's not a criminal -- I AM!
Charles Anderson: Go on. Make me feel bad. Done yet?
Spider-Man: Almost. The Kingpin got HIS reward?! Well, take a gander friend! I've got MINE!

I hope all of you had an excellent holiday and before the year ends, I have some more financial implosions to present.

Developers Ask U.S. for Bailout as Massive Debt Looms

With a record amount of commercial real-estate debt coming due, some of the country's biggest property developers have become the latest to go hat-in-hand to the government for assistance.

A recent report by Deutsche Bank shows a sharp drop in the number of loans paying off from October to November. (.pdf)

They're warning policymakers that thousands of office complexes, hotels, shopping centers and other commercial buildings are headed into defaults, foreclosures and bankruptcies. The reason: according to research firm Foresight Analytics LCC, $530 billion of commercial mortgages will be coming due for refinancing in the next three years -- with about $160 billion maturing in the next year. Credit, meanwhile, is practically nonexistent and cash flows from commercial property are siphoning off.
Unlike home loans, which borrowers repay after a set period of time, commercial mortgages usually are underwritten for five, seven or 10 years with big payments due at the end. At that point, they typically need to be refinanced. A borrower's inability to refinance could force it to give up the property to the lender.

There is absolutely no logic to support an argument to include these developers in the bail out because all they want to do is to hold onto to their buildings. And with the commercial rental market tanking, they want the government to act as their surrogate tenant until the market picks up again. These developers are not lending out any money to others nor are they are providing any services to the public.

Back in the 80’s the real estate developers got hit, albeit, it was not as large as what is happening now, but those developers did not run to the government for milk money when their teets ran dry. If they could not hold onto to their buildings, they declared bankruptcy and turned the keys in.

Real estate development is akin to making a movie because there are so many moving pieces involved and the chaos it brings. And like movies, alot of them fail to make any money. That is why the successful developer needs to act like Roger Corman in order to make a profit.

As for them bitching and moaning about how dire the situation is, I believe the expression is “You sleep in the bed you s**t in .” Real estate development is not a risk free endeavor. One of those risks is being able to pay a mortgage. If you can’t pay, you can’t play and you can’t stay. These developers were fully aware of what they were getting into. So what the hell happened? These geniuses rolled the dice and came up Snake Eyes. So when they jumped off the cliff. Instead of water they landed on concrete. So they should bend over and take it like a man.

Here's more fun news about the bailout.

Where'd the bailout money go? Shhhh, it's a secret

It's something any bank would demand to know before handing out a loan: Where's the money going?

But after receiving billions in aid from U.S. taxpayers, the nation's largest banks say they can't track exactly how they're spending the money or they simply refuse to discuss it.

"We've lent some of it. We've not lent some of it. We've not given any accounting of, 'Here's how we're doing it,'" said Thomas Kelly, a spokesman for JPMorgan Chase,
which received $25 billion in emergency bailout money. "We have not disclosed that to the public. We're declining to."

The Associated Press contacted 21 banks that received at least $1 billion in government money and asked four questions: How much has been spent? What was it spent on? How much is being held in savings, and what's the plan for the rest?

None of the banks provided specific answers.
"We're not providing dollar-in, dollar-out tracking," said Barry Koling, a spokesman for Atlanta, Ga.-based SunTrust Banks Inc., which got $3.5 billion in taxpayer dollars.

Some banks said they simply didn't know where the money was going.
"We manage our capital in its aggregate," said Regions Financial Corp. (RF) spokesman Tim Deighton, who said the Birmingham, Ala.-based company is not tracking how it is spending the $3.5 billion it received as part of the financial bailout.

The answers highlight the secrecy surrounding the Troubled Asset Relief Program, which earmarked $700 billion - about the size of the Netherlands' economy - to help rescue the financial industry. The Treasury Department has been using the money to buy stock in U.S. banks, hoping that the sudden inflow of cash will get banks to start lending money.

Cash is king right now and the banks with access to the bailout want to sit on the throne as long as they can before they are dragged kicking and screaming to lend it out. So what are they really doing with the money? Maybe they are using it to acquire their competitors, maybe there waiting for the economy to get a lot worse to leverage their position. I have no idea. I am not a bank. But I will not fault them for their actions because it is in their nature to act in their own best interests.

What we have here is a financial Katrina and TARP is playing the role of FEMA. Despite having a deal put together between the government and finance industry, Paulson, whether through his own incompetence or he just did not want his friends in finance experience any interference, did not install the infrastructure to ensure proper use of the money. And this is just the beginning of the stories we will here of bailout money not being utilized properly.

And of course we have Bernard Madoff who should be called the Dr. Kevorkian of Wall Street.

L’Oreal Heiress Bettencourt Invested With Madoff (Update3)

Liliane Bettencourt, the world’s wealthiest woman, entrusted part of her $22.9 billion fortune with Bernard Madoff through the fund manager found dead in New York yesterday, two people familiar with the matter said.

The 86-year-old daughter of L’Oreal SA founder Eugene Schueller was the first investor in a fund managed by Access International Advisors, the people said, speaking on condition of anonymity because her investment isn’t public. The body of Access co-founder Thierry Magon de La Villehuchet, 65, was found in his Madison Avenue office yesterday. Police said he probably killed himself.

Here’s another reason why not to bother going to NYU for school.


NYU, one of the largest private universities in the US, says it may have lost more than $24 million due to Merkin's investments with Madoff "in the face of an extraordinary number of 'red flags.' "

NYU had some $94 million invested with Merkin's fund of hedge funds, Ariel, according to the complaint. Merkin, in turn, entrusted a good portion of that money to Madoff, who recently confessed to swindling $50 billion from a worldwide network of investors.

It appears that NYU is still maintaining their current record of making horrible investment choices. But they have nothing to worry about. All they have to do raise tuition again in order for their amigos on Wall Street to get liquidity.

And where is Madoff? Is he spending his time at Riker’s with 3 hots and a cot?

F**k no!

He is at his nice warm, spacious co-op under house arrest.

The quotes presented in the beginning of this entry are from an issue of the Web Spider-Man #6 which had a Secret Wars II crossover. I am not going to explain Secret Wars II because then I would have to explain the first Secret Wars, which is a great read but would require a dissertation to fully understand what is going on.

This particular issue is quite fascinating since it deals with corruption, imminent domain, government ineptitude and how people react when faced with a literal mountain of gold that has appeared in midtown Manhattan.

What occurrsin this particular issue is that the Beyonder turns an entire office building into solid gold which collapsing onto itself resulting in the deaths and injuries of innocent people.

Spider-Man being Spider-Man swings to the rescue but is shot at by the authorities led by Federal agent Charles Anderson who declares that it is now a federal matter.

After rescuing as many people as he can, Spider-Man spots the Kingpin of crime in a limo who has concluded a transaction with Anderson. In exchange for the Kingpin’s help in securing the site of gold and preventing looters from overrunning it , the Kingpin is given several gold typewriters.

Obviously Spider-Man is pissed and screams at agent Anderson does something that is complete out of character. He takes a solid gold notepad for himself.

This particular issue resonates with me because of the developments that I have presented in this entry.

I have a good understanding of how this game is played and who the players are. Perhaps I am a little wiser in my old age but I realize getting angry at forces that are beyond my control is pretty useless. So these quotes from Spider-Man do not reflect my state of mind.

However Spider-man's mental state in that issue reflect a lot of what people are feeling in America. Who are they? These are the people who are getting foreclosed upon, the people who are watching their 401Ks disappear, the people who are seeing those with more still getting more even though they made the same mistakes as everyone else.

These are the have nots. And sooner rather than later they are not going to take it anymore and will demand their golden notepad.

And if there are no golden notepads to appease the masses, well our government has that covered.

Wednesday, December 24, 2008

Hard Candy Christmas

Robotech and Dolly Parton. Two things that go great together.

And if you still can't get enough of Dolly.

So what is up with this Dolly kick? Yesterday I heard Hardcandy Christmas for the first time and it was quite enjoyable. I always thought of Parton as a novelty act, but after hearing some more of her songs and reading about her, I realize she is like Dick Clark. Only viewed in one dimension but actually brilliantly versatile. Dolly Parton is also a very successful business woman on par with Oprah. Which proves that big breasts mean big brains.

Monday, December 22, 2008

A blizzard of falling knives

This is what you are going to be dealing with in the current real estate market.

The residential market is crashing

"Both residential and commercial real estate markets have softened substantially since the last report, most notably in Manhattan," said the edition of the Federal Reserve Board's "beige book" that came out earlier this month.

The report, which looks at market conditions in various cities eight times a year, found that "the prices of Manhattan co-ops and condos are reported to have fallen by 15 to 20 percent since mid-summer, though it is hard to get a clear handle on prices due to thin volume. Much of the recent activity is reportedly from desperate sellers."

Jonathan Miller, president of appraisal firm Miller Samuel, which provided data for the Fed's analysis based on contract prices after a series of confidence-shaking bank failures and federal bailouts, said the drops are somewhat unsurprising. Prices historically fall after sales volume slows, and volume has ebbed considerably in recent months.

Indeed, sales have been off about 28 percent for the first three quarters of this year, versus the same year-ago period, Miller said.

"A drop in transactions always precedes a drop in prices, because it leads to [an] increase in inventory," he said. "It's really a canary in the subway."

And no sector of Manhattan seems immune, including high-end units, or those priced upwards of $10 million, which had previously propped up the market's average prices, brokers said. Prices of resales, as opposed to new development, which had shown some resistance to price dips, now also seem to be slipping, brokers added

It looks the same for the commercial market.

Almost 16 million square feet is currently listed as available in large blocks in 68 office buildings in Manhattan, according to Colliers ABR, a commercial brokerage firm. That is nearly double the space available a year ago, both in terms of the number of large office blocks — which in New York usually means 100,000 square feet or more — and in terms of total square feet.

Those figures are widely expected to go much higher, said Robert L. Sammons, the managing director of research for Colliers ABR. He said it was difficult to get a handle on exactly how much space financial companies alone might put back onto the Manhattan office market over the next year or so.

“Honestly, I don’t think any of these financial firms know how this is going to play out,” he said. “They are trying to figure out how many people they will need on staff, and in some cases how they are going to stay in business.”

Pending layoffs in the financial industry certainly account for some of the space on the market. But there are other factors. Some companies are moving into new headquarters — which were first planned years ago — while others are disposing of real estate that they came into through acquisitions.

And Bernard Madoff pretty much dropped a load of napalm on a fire that was already raging.

"The level of devastation, both financial and on a human level, is astounding,” said Robert J. Ivanhoe, a lawyer who is representing 10 developers and investors who lost $5 million to $50 million each with Mr. Madoff.

Indeed, at an industry fund-raiser at the Grand Hyatt hotel in Manhattan last weekend, much of the chatter over sushi and crudités was about money feared lost with Mr. Madoff, according to people who attended. And a Manhattan psychotherapist who counsels real estate leaders and bankers said most of the patients he has seen this week have close friends and relatives who lost money with Mr. Madoff.

The victims include executives at the global commercial brokerage CB Richard Ellis, most prominently Stephen Siegel, a major Bronx landlord who is chairman of worldwide operations at the brokerage and whose wife, Wendy, helped organize Saturday’s fund-raising dinner.

Brian S. Waterman, a principal at Newmark, also invested with Mr. Madoff. So did the Rechler family, which has been a major owner of office buildings in the region. Scott Rechler, the head of RexCorp, one of the family’s largest firms, called the family’s exposure “limited.”

Jerry Reisman, a lawyer based in Garden City, N.Y., said he was representing six commercial real estate investors and developers in the area who lost a total of $150 million to Mr. Madoff. They met Mr. Madoff through contacts at country clubs in the tristate area, he said.

“They knew him from golfing in the Hamptons. They knew him from the locker rooms,” Mr. Reisman said. “He was considered a wizard.”

Mr. Reisman said his clients were especially concerned because they counted on Madoff investments to complete some of their real estate projects, pledging their investments as collateral for projects. Those developers fear that when their banks realize that their investments with Mr. Madoff have disappeared, they will demand new collateral from other sources, Mr. Reisman said.

Finding those alternative lenders will be difficult given the financial crisis — and given that many other real estate investors have been hurt by the Madoff case.

“Many of these developers, their resources are all with Madoff,” Mr. Reisman said.

There are widespread concerns that some developers will have trouble completing projects currently under construction. Edward Blumenfeld, who runs Blumenfeld Development Group, had invested heavily with Mr. Madoff and considered him a friend. Gary Lewi, a spokesman for Mr. Blumenfeld, said he still planned to complete a shopping complex in East Harlem that is to include a Target and a Costco, as well as several other projects where construction is “in the ground.”

Some members of the real estate industry are receiving the news with a mix of schadenfreude and sadness for their peers. Jeffrey R. Gural, chairman of Newmark Knight Frank, the brokerage firm, said Mr. Madoff had turned his family down as investors about eight years ago because they would not invest at least $20 million. For years, he said, colleagues introduced to Mr. Madoff through relatives or country club friends had sung his praises.

“People used to brag how they were getting these great returns when everybody else was struggling,” he said. “They thought Bernie Madoff was a genius, and anybody who didn’t give them their money was a fool.”

The impact is already spreading to the residential real estate business. Brad Friedman, a lawyer representing about 100 investors primarily in New York and Florida, said several clients have already said they plan to put their apartments on the market. They depended on their Madoff investments to pay their mortgages and co-op fees.

“With that source of money frozen, they’ve got no cash,” Mr. Friedman said. “They can’t pay the electric bill. They can’t pay the mortgage.”

Other buyers have already backed out of deals because they had invested with Mr. Madoff and can no longer finance their purchases. Michele Kleier, a prominent Upper East Side broker, had buyers pull out of purchases on two $2 million apartments because they had lost money to Mr. Madoff. The first buyer put in an offer at 3 p.m. last Thursday, the day of Mr. Madoff’s arrest, only to withdraw it by 5:30 p.m.

The second set of buyers had visited an apartment three times, requested the financial information about the co-op and had the broker notify Ms. Kleier that they would be making an offer on Monday morning. On Monday, she learned that the buyers had backed out because their money was tied up with Madoff funds.

The real estate market has gone beyond the falling knife stage and is now in the knives being chucked everywhere stage and there is no incentive for anyone to put their hands out. Even people with a lot of liquidity are going to want to head to the bomb shelters and wait it out.

I realize I am sounding redundant hut I recommend that everyone at this point retreat and hole up while closely observing the market to see what is out there. Even if you see a good deal, approach with caution because it is not enough to be just a good deal particularly with commercial properties. With the economy tanking and signs that we are dealing with a depression, there is not going be a huge demand for commercial space due to massive layoffs and bankruptcies.

For those of you who want to buy a home for yourself, I would really wait at least a year. Depending on your career, you might not have a job to pay for the mortgage and maintenance. And chances are the ones who have to sell maybe in dire need to liquidate due to being let go. Sellers that are still uneducated with the current market are going to get a very harsh lesson in this downturn.

Renters, start looking at other places to live because your landlord might raise the rent out of desperation. If that occurs, renters have the advantage of other options and right now there are plenty.

Sellers, you're f**ked. Unless you are willing to make some serious changes in your prices or are willing to wait for the next cycle which probably won't occur until Obama runs for re-election, you are pretty much in between the proverbial rock and the place known as hard. If you want to get the most for your money in this market and have a healthy tolerance for aggravation, I will give you 4 letters. F-S-B-O. Look into it.

What really freaks me out about this situation is that there is usually a segment of the population that is ready to suck up the distressed properties and other forms of debt when the market goes pop. These parties usually offset the imbalance and at least keep everything rolling even during a down market. It does not appear those players are rising to the occasion.

This will explain why.

Property markets frozen
Commercial real estate buyers not biting at current prices

"I don't think this is a blip. We've gone far past a blip," said Randy Reiff, senior managing director for J.P. Morgan in New York. "We're in a protracted, massive restructuring of our capital markets. Even the lenders who are out lending are slowing down right now. And that is only the people who are accustomed to high-risk, opportunistic investing who don't believe they have to buy at the bottom."
"The only people talking are those facing the situation where they have to refinance maturing debt or hand back the keys" to the lender, he said.

Reiff's warning about falling knives was stated in October of 2008. The knifes are still flying and at this rate we will probably be dealing with machetes for quite awhile.

2009 is going to suck ass.

Thursday, December 18, 2008

How to avoid a Madoff

This man should not be walking alone on the streets.

DISCLAIMER:I am not an expert in finance or law. This is just my opinion so take it with a grain of salt. Also I am going to go off in a tangent or two but they will have a point.

If you have read any of those articles regarding Madoff a common theme is that a lot of these people exercised the “putting all my eggs in one basket” mentality. This story about a former editor turned artist is especially disheartening.

These are not stupid people. Whether you are able to accumulate 100 grand or a hundred million, it does take a bit of intelligence and self discipline which these people obviously exhibit. So what happened?

I think the great Eric Hoffer can explain this.

People whose lives are barren and insecure seem to show a greater willingness to obey than people who are self-sufficient and self-confident. To the frustrated, freedom from responsibility is more attractive than freedom from restraint. They are eager to barter their independence for relief of the burdens of willing, deciding and being responsible for inevitable failure. They willingly abdicate the directing of their lives to those who want to plan, command and shoulder all responsibility.

Page 109 paragraph 93
The True Believer
Eric Hoffer

Basically these people felt they could not be bothered because they either felt they did not have the financial acumen that Madoff claimed to have or they felt they being held responsible for their own financial livelihood was too much of a burden.

This is the wrong attitude to have with money. Whether you have earned it or inherited it, that is your money. You are responsible for how it is spent, how it is cultivated and how it is lost. You can’t deal with that? Then feel free to give it to me. I will be more than happy to permanently take it off your hands as long as you do not want it back.

Martial arts, particularly kung fu often have an air of mystery and exoticisms. This is due in part because of kung fu movies and the ignorance of people. The irony is that there is nothing mysterious about martial arts at all. They are simply a set of coordinated physical exercises that combines breathing techniques and mental visualization.

The source of all this mystery stems from how martial arts were taught. Back in ancient China there was really no barrier of entry to learn techniques. All you had to do was to observe the technique practice it and then presto, you would be able to utilize it. Of course this took a couple of years but you get the idea. A lot of masters feared that their techniques would fall in the wrong hands and be used against them. That is why schools often practiced at night in secret and some masters usually only taught 60 percent of what they knew in case a student turned on them so they would be able to lay the smackdown on any of their students.

Interesting bit of trivia-Bruce Lee got into a lot of trouble by violating the rule of secrecy when he was one of the first teachers to openly teach non-Chinese people martial arts in San Francisco. This led to a challenge match from other masters, which became the catalyst for his philosophy known as Jeet Kune Do.

Please observe the following video.

It looks like this guy is not doing much, however in a fight, this guy could probably kill or maim you. One of the ways the masters preserved their secrets was to develop techniques that were based on deception. This served two purposes. If someone did steal a technique from a school, they only knew the movement itself, they would have no idea what the applications were. It is sort of like giving someone a Ferrari, unless they know how to drive stick, the transmission is going to be grind itself into paste and the car will be completely useless to them. The second purpose is that when it used in combat, the person being attacked would lower their guard by the weak appearance of the technique.

Unfortunately this mysterious nature of martial arts has brought a ton of charlatans out of the wood work who claimed to be the masters of this martial arts when in fact they are no different than carnies at a fair, like these jokers.

Madoff is no different than those charlatans who claim they have been blessed by the spirit of Bruce Lee. He used an air of mystery to rip people off with his ponzi scheme and was able to avoid disclosure by claiming it would result in theft of his investment techniques. Despite playing close to the vest, he was able to keep his marks on the hook as long as he did because of the "returns" of his investments.

It has been reported he would often turn away prospective investors and create an armor of exclusivity that was so strong that people joined The Palm Beach Country Club just so they could have the chance to give him their money.

So how does one prevent from getting entangled with a Madoff? Well it appears just knowing his friends is not enough since he ripped them all off. Perhaps go to the SEC?

Madoff warnings 'ignored for 10 years'

The world's biggest fraud could have been averted if the Securities and Exchange Commission (SEC) had acted on numerous warnings about Bernard Madoff's financial impropriety years ago, the regulator's chairman admitted last night.

Christopher Cox, the chairman of the SEC, effectively admitted mea culpa over the scandal after conceding that tip-offs were repeatedly made to the investors' watchdog but never resulted in any investigation.

Hmm. Now how the hell did that happen? You don’t think? Could Gawker be right about this?

Ponzi Schemer's Label-Whoring Niece Married SEC Lawyer

It is purely circumstantial but it appears Madoff had one or several angels at the SEC making sure that any accusations of fraud fell on deaf ears, allowing him to maintain that impeccable reputation of his.

Instead of looking at his friends or the SEC for help, perhaps looking at the people who do not want to be his friends is next best thing.

“The numbers were too good to be true, for too long,” said Girish Reddy, a managing director at Prisma Partners, an investment firm that invests in hedge funds. “And the supporting infrastructure was weak.” Mr. Reddy said his firm had looked at the Madoff funds but decided against investing in them because their performance was too consistently positive, even in times when the market was incredibly volatile.

Reddy and others who walked away from Madoff knew something was up. They weren’t quite sure what it was but there something Madoff was doing that was not kosher and they were determined to stay on a pork free diet.

In the episode 85 of the final season of the Shield, titled "Party Line" , Vic Mackie hires a bunch of Mexican gangbangers to hunt down his ex-friend Shane. When the Mexican gangbangers catch up to Shane and his family, Shane convinces them to let him go for 20 grand. As he is getting the money, the gangbangers notice that he has 100 grand and renegotiate for the rest of the money at gunpoint. This incident is a key plot point that ultimately sets Shane and his family on a path of no return.

I realize this is a tv show but it always gets on my nerves when characters do stupid things like this. What Shane should have of done was take 90 grand and gone to Mexico with it. He should have opened up multiple accounts in several banks and divided the money among these accounts and in safe deposit boxes.

He should have taken the rest of the 10 grand divided it up in increments of $500 and hidden them in his truck and on himself. If he had followed that plan the worse that could have happened to him was that he would be ripped off for 10 grand. In other words he should have exercised a strategy of diversification and asset allocation.

Want to play eggs in a basket? Fine, make sure you have plenty of baskets to spread your eggs. You also need to understand what type of baskets you are going to use. How strong are they? What could make the basket fall apart?

If the basket does fall apart then at least you have other eggs to fall back on. If these people had exercised a strategy of re balancing and diversification, they would have still have lost money with Madoff but not as much as they did now.

For those of you who have no idea where to start with your education, I recommend the following three links.

Investor Education Alliance

As I stated in a previous entry, take your time. Even with that massive rate cut the fed gave, it still hasn't jarred the markets into motion so it appears that it will be awhile before things start to cook. Make an effort to understand what you are investing in.

Wednesday, December 17, 2008

A tale of two douchebags

There was one particular individual from my media days that I truly believe was a sociopath since he pretty much said what he wanted regardless of how people reacted. He justified his behavior stating that this is the way he was and you had just better accept it.

Part of his mental schema was also being a huge hypocrite. He claimed to harbor great devotion and love for his live in girlfriend at the time but at the workplace he was a poon hound in need of a serious of spaying. Not only would he talk about sex but also he would openly speak about his work place conquests in vivid detail.

Looking back I realize this douchebag had a raging inferiority complex and that he covered it up with his out of control ego. He would often fill the dead air of the office by talking a very big game. That what he was doing now was a true waste of his talents and that we should all be glad that we were even in the same room with him since his true potential was about to be unleashed.

From what I know whatever potential he had or claimed to have is dead because none of his goals ever came to fruition.

I bring up this particular a$$hole up because he reminds me of the two douchebags that are currently in the news.

The first is Bernie Madoff who has become the poster boy of the biggest and longest Ponzi scheme ever to hit the financial world and alot of people are hurting because of him.

While Mr. Madoff is facing federal criminal charges, accused by federal prosecutors of operating a vast $50 billion Ponzi scheme, many of his clients are facing an abrupt reversal of fortune that is the stuff of nightmares.
“There are people who were very, very well off a few days ago who are now virtually destitute,” said Brad Friedman, a lawyer with the Milberg firm in Manhattan. “They have nothing left but their apartments or homes — which they are going to have to sell to get money to live on.”

From New York to Palm Beach, business associates of Mr. Madoff spent Friday assessing the damage, the extent of which will not be known for some time. Many invested with Mr. Madoff through other funds and may not know that their money is at risk.
Emergency meetings were being held at country clubs, schools and charities to assess the potential losses on their investments and to look for options.
There is not much guidance available yet from regulators. On Friday, a federal judge appointed a receiver to oversee the Madoff firm’s assets and customer accounts. A Web site is being set up to keep customers informed, but no one is sure yet whether any sort of safety net will catch the most vulnerable investors.

For Stephen J. Helfman, a lawyer in Miami whose father had opened an account with Mr. Madoff more than 30 years ago, the news on Thursday came as a hammer blow.
“The name ‘Madoff’ has overnight gone from being revered to reviled in the Helfman family,” Mr. Helfman said on Friday. His grandmother, at 98, relied on her Madoff money to pay for round-the-clock care, he said, and his two children’s college funds were wiped out.
“Thirty-six years of loyalty, through two generations, and this is what we get,” he said.

The news was equally devastating for the Robert I. Lappin Charitable Foundation in Salem, Mass., which works to reverse the dilution of Jewish identity through intermarriage and assimilation by sending teenagers to Israel and supporting other Jewish education efforts.

The foundation was forced on Friday to dismiss its small staff and shut down its programs to cope with its losses in the Madoff funds, according to Deborah Coltin, its executive director.

“We’ve canceled everything as of today, everything,” she said tearfully.
Ms. Coltin said she did not know how the little foundation came to be so exposed to the Madoff firm. Its most recent tax filings show that it had $7 million at the end of 2006, with $143,344 in stocks and the rest in “government securities.”
It reported the sale that year of “Bernie Madoff” securities, but did not explain what those securities were.

Sam Englebardt, a media investor in Los Angeles, said several relatives had entrusted virtually all of their assets to Mr. Madoff — and he understood why.
“It seems like a huge over-allocation, I know,” Mr. Englebardt said. “But remember, they had started out small and invested over 5 years, 15 years, 30 years — and every year they got a great return, and they could always take money out without ever having a problem.”

As that track record lengthened, his relatives gradually entrusted more of their savings to Mr. Madoff, he said. “I suspect that is what has happened across the board,” he added. “People came to trust him so much that, eventually, they trusted him with everything.”

Such stories were repeated in e-mail messages and telephone calls throughout the day on Friday. A woman in Brooklyn whose father died just weeks ago found that his entire estate and a substantial portion of her stepmother’s money was invested with Mr. Madoff. A law school official in Massachusetts fears he has lost millions in the collapse of the Madoff operation.

But hey, Madoff is a good guy, he fully intedned to give out about $300 million to his employees, even though that money wasn't his. But hey his heart was in the right place. Of course he has destroyed countless lives with his massive ponzi scheme, but he is a good guy. Despite the fact the entire world is reeling from his unadulterated fraud.

By this account, Mr. Madoff told the executives he intended to surrender to the authorities in about a week but first wanted to distribute approximately $200 million to $300 million to “certain selected employees, family and friends.”

Now we have douchebag #2, the not so marvelous Marc S. Dreier.

Marc S. Dreier knew the 45th-floor conference room of Solow Realty well. He had been in it many times as a trusted lawyer for the company’s founder.

So nothing seemed amiss when he showed up one afternoon in October and told a receptionist he had a meeting with her boss, people associated with Solow say.
Mr. Dreier was elegantly dressed, as always, the people said. He had three people with him. The receptionist ushered the group past her desk. They were sitting there, visible inside the glass-walled room, a few minutes later when the boss, Steven M. Cherniak, happened to walk by.

Mr. Cherniak would later tell people at the company how surprised he had been to see Mr. Dreier. He had not scheduled any meeting with him, and he had no idea what Mr. Dreier was up to.

But people there gave little thought to Mr. Dreier’s odd visit until November, when the company’s founder, Sheldon H. Solow, received a disturbing call. The caller wanted to let Mr. Solow know that Mr. Dreier had offered him the chance to buy promissory notes that had been issued by the company, people associated with the firm said.

They were fake notes, and shortly thereafter, lawyers for Solow Realty — different lawyers — were in touch with federal authorities, reporting their suspicions that Mr. Dreier might be engaged in financial fraud.

Since that opening tip, federal authorities have been tracking what they describe as a brazen swindle of some of New York’s savviest investors by one of New York’s more accomplished lawyers. Mr. Dreier has been charged with multiple frauds in the United States and a related crime in Canada, and is being held without bail in Manhattan.’

Now this is ballsy, even for a lawyer of his stature. When you pull a fraud of this magnitude, people eventually start to ask questions when it turns out they have been had. If the fraud had gotten as far as Dreier selling those notes, I am curious what his next move would have been since every bounty hunter in the land would be after him

As the Dreier firm’s lawyers rummage through the law firm’s books, which had been until recently Mr. Dreier’s exclusive preserve, they are finding that bills have not been paid in months. Their health insurance is in default and the firm will not be able to make its $2.6 million payroll on Monday, lawyers there say.

“No one is in charge,” Vincent F. Pitta, a lawyer at the firm, complained last week in an affidavit in support of a government request to freeze assets. “The news of Mr. Dreier’s arrest has had a neutron-bomb-like effect on Dreier L.L.P.”

These people are pretty much f**ked. Not only are they not going to get paid and with the current economic conditions it will be very difficult for them to find another job. To make matters worse Dreier’s entire firm is on the hook for any losses he has incurred because they have no insurance coverage.

In my next entry, I will attempt to present ways you can protect yourselves from these types of individuals.

Monday, December 15, 2008

Watch and Pray

Watch CBS Videos Onlineu can

This is my opinion.

1. Buyers, try putting off buying a home for another year because there will be a ton of homes at bargain basement prices.

2. Sellers if you want to cash in big, you maybe looking at least half a decade before the cycle begins anew. If you can hold your property for that long, by all means do so. If you can't, get aggressive about finding a qualified buyer. That means making a price cut.

3. Manage your debt. Depending on how much credit card debt you, get rid of all of it. If it is an exorbitant, then write up a budget and determine a way to pay it down. Credit card debt sucks because it is not tax deductible and will mess with your FICO score.

4. Take care of your health. I know that is common sense, but during these stressful times it is easy to let that slide. Don't let that happen. You do not need to be a member of a gym to exercise properly and you do not need to buy only organic food to eat healthy. Unless you work in the medical industry, sickness is not a profit center it is a cost center.

5. If you still work in finance, start stocking away your cash and prepare not one but at least 5 back up plans in case you get laid off. And with the next wave of asset implosions hitting Wall Street, there is no doubt there will be more blood on the street.

6. Those of who you are hiding in grad school waiting for the next cycle of job openings, it might not happen when you graduate. Already I have heard chatter that even getting an internship in certain industries is all but impossible.

7. If you have an Alt A or something type of exotic mortgage that is due to reset and bite you on the ass, do not despair. You have one advantage which is that you a window to get your options ready. Maybe you sell, maybe you begin setting up a reserve fund or maybe you walk away. This is the time to examine your mortgage and get help to figure out what to do.

8. The bailouts have just begun. If things are bad now for the finance and automobile industry, there does not appear to be any type of improvement for those industries on the horizon and they will most likely be joined by others. Already states governments are lining up for loans from the Fed because their unemployment funds are running on empty.

9. For those with liquidity, there will be ton of opportunity for investments since there will be dirt cheap options out there. However, I would still be take an air of caution because of the unpredictable nature of our world today. And I would strongly advise people to take their time since this recession is not going end any time soon so there will multiple opportunities to invest.

Monday, December 08, 2008

SCARSDALE IS F**KED!: Scarsdale launches the charm offensive.

Fiendish Scarsdale High School! You done f**ked up now!!!

Well Whoppity doo, isn’t this a coincidence, Just when US News and World Report releases their college and ratings issue detailing Scarsdale's fall from grace and the ascension of Yonkers, The New York Times publishes this super fluffy bunny with a bit of bite of an article of how honky dory things are in Scarsdale with the Advanced Topics program.

I am not accusing anyone but I do question the timing of the publication of this article. I suspect that that certain parties wanted to soften the blow from Scarsdale High School's low rankings in the US News and World Report.

Here are some bits and pieces that I think you will find appetizing:

SCARSDALE, N.Y. — The Advanced Placement English class at Scarsdale High School used to race through four centuries of literature to prepare students for the A.P. exam in May. But in this year’s class, renamed Advanced Topics, students spent a week studying Calder, Pissarro and Monet to digest the meaning of form and digressed to read essays by Virginia Woolf and Francis Bacon — items not covered by the exam.
A similarly slowed-down pace came at a cost for some students in one of Scarsdale’s Advanced Topics classes in United States history; it was still in the 1950s at the time of the exam, whose main essay question was on the Vietnam War.
Sarah Benowich, a senior, said that the A.T. approach had improved her writing but that she would have liked more dates and facts worked in. Despite studying Advanced Placement exam review books on her own, she still felt “shaky on some of the more concrete details,” she said.

More objective measurements have been mixed, with fewer students taking A.P. exams, and average scores rising in five Advanced Topics courses but dropping in two: United States history slipped to 4.2 out of 5 from 4.4 the year before (Sarah got a 4) and United States government fell to 3.4 from 3.8.

And despite concerns from some parents, 49 percent of the 2008 graduating class are attending the nation’s most competitive colleges — a group of about 80 schools identified by Barron’s Profiles of American Colleges that includes the Ivy League — compared with 45 percent in 2007.

Despite some students getting smacked around by the AP test due to the lack of proper preparation, the class of 2008 looks rather impressive.

And the principal is not wasting anytime swinging his testicles around and savoring the glory of this new age.

“We have the luxury of being able to move beyond the A.P.,” John Klemme, Scarsdale’s principal, said in a recent interview. “If people called it a gold curriculum in the past, I refer to this version as the platinum curriculum.”

Whoa there big stallion, there are others who beg to differ.

The College Board, a nonprofit organization, derives about a third of its $600 million revenue annually from Advanced Placement exams, which cost students $86 each (schools can keep $8 of that fee to pay for proctors and professional development). Schools do not pay to run A.P. courses.

Trevor Packer, a College Board vice president, questioned why Scarsdale was “pointing a finger” when each school is responsible for designing its own A.P. curriculum, subject to the College Board’s review. He rejected the notion that the Advanced Topics courses were better preparing students for college, and noted that Scarsdale continued to submit syllabuses from its Advanced Topics courses for review.

“To us, their courses don’t look any different from high-quality A.P. courses,” he said. “Simply changing the letters on the course from A.P. to A.T. looks very cosmetic to us.”

Scarsdale still has its fingers in the AP pot which is odd since if they are so confident with the new curriculum, the why are they collaborating with those they despise?

The change has also drawn criticism from some parents like Jill Rosell, a mother of two, who resigned as president of the Scarsdale Council of Parent-Teacher Associations and later moved to nearby Chappaqua.

“There was never a compelling rationale for them to change it,” Ms. Rosell said. “I have not changed my mind, one iota, about the value of A.P. courses.

Ms. Rosell, if you are reading this, you did the right thing. From what I have read there was no reason for Scarsdale to ditch the AP curriculum and God knows what the results will be down the line. Why subject your children to the unknown? You are better off in Chappaqua.

Richard Brodow, the superintendent in Millburn, N.J., said that he was considering adopting “the Scarsdale model” but that it would not be easy, noting that his high school was recently ranked best in the state by New Jersey Monthly magazine based partly on the number of Advanced Placement exams offered and the percentage of students scoring 3 and above. “The reality is that it means a lot to people in the community,” he said after observing Scarsdale’s Advanced Topics classes last month.

He is a top educator but he knows that the customer is always right i.e parents who pay taxes in the community. Brodow is not going to dare mess with the secret sauce unless he has the leverage to do so. That will only happen if Millburn High School’s status plunges and something drastic needs to be done.

As you can see there is a bit of dick slamming going on in this article, which can only be silenced when the true facts come out. That will only happen after at least ten years have passed and the numbers are compiled on students who participated in the AT curriculum and comparing it to students who were part of an AP curriculum. That also includes 10 years of college acceptances from that same pool of data.

I stand by my assessment that unless you plan on sending your kids to private school avoid moving to Scarsdale at all costs. Besides the drop in school rankings, the educators of Scarsdale are taking a spit and bailing wire approach to countering the to the Advanced Placement courses.

A handful of exclusive private schools, including Ethical Culture Fieldston, Dalton and Calhoun in New York City, have abolished Advanced Placement courses in recent years, but Scarsdale has set a precedent for high-achieving public schools. It did so deliberately, investing $40,000 to bring in 25 professors from Harvard, Yale, New York University and other top colleges to help develop the Advanced Topics curriculum, and having guidance counselors contact admissions officers at 130 selective schools to explain the change and gauge any concerns.

What does 40 K buy you? Not a lot. What Scarsdale is probably getting are some emails and phone calls from some tenured professors who are giving out some suggestions and maybe a couple of PDF’s of syllabuses of college courses that the teachers at Scarsdale can crib from in order to create their “original curriculum.” Besides lip service from professors, the guidance counselors now probably have a bigger expense budget to schmooze with college admissions officers and try to sell the Advanced Topics courses over a steak dinner.

In order to implement a serious curriculum change that will not only challenge the Advanced Placement courses but also prepare your students to take the AP tests you need not one, not two but a team of educators who have backgrounds in curriculum design, educational theory,testing and one statistician. These people will also need to have a proven track record of success in completing these types of projects. Through research and evaluation, the team needs to create measurements and benchmarks in order to reach their end goal.

And even after the curriculum has been designed and implemented, the job isn’t over for the team. They need to evaluate and update the curriculum to the needs of the students and the standards of the AP on a yearly basis. They need to constantly evaluate their findings in order to determine what the strengths and weaknesses of the new curriculum are and how to further augment it. Teachers can participate but only if they fulfill the proper requirements and they are placed under command of the team.

If you want colleges and universities to take your curriculum seriously you can’t just hand this task over to a bunch of cold calling guidance counselors. You have to a pull a Barack Obama and stage a massive campaign to inform and persuade the college admissions community that not only does your curriculum go beyond the standards of all AP courses, it will also produce enlightened students that will further enrich the student bodies of all colleges. You also need to hit the educational PR circuit to alert the academic community of your new phases. This requires a consulting/PR firm that has a roster of former Ivy League presidents and one former President of the United States. Preferably Bill Clinton.

40 K does not cut it. You are looking at a budget in the high 6 figures or low 7 figures because people who specialize in massive earth shattering change do not come cheap.

“The College Board sees a challenge to their brand, and what they’re trying to do is say we never intended these courses to be prescriptive,” said Mr. Hammond, a former Advanced Placement history and macroeconomics teacher. “That’s window dressing and public relations. The truth is you still have to cover these topics, but they don’t want to say that aloud anymore because they recognize they have a political problem.”

Scarsdale is guilty of doing the exact same thing. They are using window dressing and public relations to create the illusion that the Scarsdale brand is now new and improved. The fact is that the Advanced Topics curriculum is in the user acceptance-testing phase. The only difference is that students are the testers and they are not being paid but their academic futures are being put in question.

Getting accepted to the top colleges and universities has become a constant melee for students and Scarsdale has the right idea in trying to their students an edge. But their execution is rather poor and unfortunately none of us know what the results of their actions will be for quite awhile.

Maybe I am wrong and I am overreacting. Perhaps Scarsdale, through sheer force of will and lot of property taxes will come out ahead. But I would rather take my chances with the Advanced Placement curriculum in Yonkers than take the Advanced Topics in Scarsdale. Yeah, it’s Yonkers but at least I know what I am getting myself into.

For those of who believe that Scarsdale will prevail no matter what, well here’s my answer to that.

Saturday, December 06, 2008


Yesterday I got a call from a family member who gave me the most insane news. According to Us News and World report Scarsdale High School is now ranked #92. While Yonkers High School is #37.

My past entries on Scarsdale dealt with the desperate brokers shilling gas and the looming foreclosures plaguing this town, which shows that even an area this prestigious is just as vulnerable to market forces like the rest of the country. But this is bat s**t crazy! When you say Scarsdale the two things that usually come to mind is rich people and an excellent school system.

So how the hell does a town synonymous with the Ivy League get its ass handed to them by a town that synonymous with horse racing?

It is because Scarsdale discarded the Advanced Placement courses and implement their own curriculum called the Advanced Topics.

Officials said the new high-level courses would place a greater emphasis on inquiry than exists in Advanced Placement classes, which can pile on the facts to produce high scores on the A.P. tests that students take in May.

According to the article there was some concern regarding the new curriculum

But the plan has been a source of considerable anxiety in some quarters. Jill Rosell resigned as president of the Scarsdale Council of Parent-Teacher Associations last month to campaign against the move. Her newly formed group, the Scarsdale Committee to Maintain Advanced Placement, started a Web site and an online petition denouncing the plan. And opponents have become a vocal presence at public meetings.

“There are a lot of people out there who are not in support of this,” Karen Kasner, a member of the committee, said at the school board meeting.

Ms. Rosell acknowledged that the Advanced Topics courses might examine certain themes in greater depth than A.P. classes. But she said that the breadth of A.P. courses provided students with the foundation they needed for college-level critical thinking.

In addition, she said, Advanced Placement is a powerful brand. And detaching Scarsdale High students from that brand, she said, would put them at a disadvantage in the college admissions process.

Ms. Rosell noted that a survey of college admissions officers conducted by the Scarsdale High School counseling office last spring found some reservations about deviating from the tried and true.

It appears that she was right.

So how did Yonkers come from behind and beat the pants off of some highly educated rich people? Two words International Baccalaureate.

Yonkers was hemorrhaging gifted students at an alarming rate since parents were sending the off to private school so in 1999 they decided to get their act together by aligning themselves with the International Baccalaureate (IB) Diploma Programme.

''Last year the school board found that they were losing its gifted population after eighth and ninth grades,'' he said. ''Parents were opting for private school. To fill that void they wanted to find a program that would link a student right after the elementary through 12th grade.''

Myrna Tortorello, assistant principal and coordinator of the International Baccalaureate programs at Burroughs, said that the curriculum is philosophically structured around five areas of interaction: expansive approaches to learning, thinking and studying; healthy living; respect for the environment; community service, and homo faber, or ''man, the maker'' in Latin, which fosters appreciation of humanity's historical innovations.

''In other countries students prepare for college really in those last two years of high school,'' Ms. Tortorello said, explaining why the Baccalaureate Organization introduced the Middle Years program in 1992. ''The diploma program is such a rich, rigorous program that the International Baccalaureate Organization realized that the preparation for that needed a more enriched program in grades 6 through 10.''

The following link is the catalog for the school.

Some very smart people put a lot of effort in creating these hardcore classes that allow students to grow and excel. Unlike Scarsdale, Yonkers hooked up with an established educational entity who knew what they were doing instead of pulling a Scarsdale and trying to reinvent the wheel.

There is no way in hell Scarsdale can compete with that. And by dropping the APs it hasn’t really helped their cause.

Until Scarsdale gets their s**t together, I would not even recommend moving there. With their school system trailing so badly, it does not justify the exorbitant amount of money one pays for a home and in property taxes.. As the saying goes in real estate in the burbs its location, location, school system. And Scarsdale messed up the last part of the formula.

Mind you, Yonkers is not exactly peaches and cream. Put Yonkers in Google news and all sort of f**ked up shit comes up. One things is for sure is that they are not stupid.

Once this news hits Brewster Road my predictions are the following.

1. The AT curriculum will be maintained out of hubris. The last thing the players behind this program want to admit is that they failed arguing that the AT program is still in the embryonic stages and needs to be developed further, of course at the cost of students being used as guinea pigs. Change will only occur once those college rejection letters start piling in and angry parents start laying the smackdown on the school board. Unfortunately, that will be a long time coming.

2. The Scarsdale Alternative School’s wait list is not going to end anytime soon because it has already established itself as a unique brand of constructive education, which many in the collegiate world recognize. So it presents an opportunity for students to be able to standout in a crowd during college application season even with the AT program pretty much tanking.

3. Scarsdale high school teachers, particularly the ones that are part of the AT program are going to be under the gun, correction, under a f**king Howitzer. to pull a hat trick to produce higher test scores. Parents and students are going to be bitching and moaning about the AT disaster and instead of taking responsibility for their own actions they will blame the teachers. Scarsdale is also non-union school district, which means unless you have tenure you could be kicked off the island any time. I would not be surprised to see Scarsdale teachers lured away to a union district in order to get away from the pressure and aggravation in exchange for job security.

4. Guidance Counselors will also be raising their intake of valium and scotch due the the hordes of angry parents demanding why their precious yet average bundles of joy did not get into Harvard. Every time these guidance counselors try to push their students for colleges for acceptance they are going to be constantly d**k slapped with the number 92 and with the competition from other school districts being so fierce, particularly ones that subscribe to the AP curriculum, it is will just make their jobs a helluva lot harder.

I can imagine in the near future a school board meeting will turn into a scene from Glengarry Glen Ross with teachers and guidance counselors being screamed at raise test scores and send more kids to the Ivy Leagues.

Friday, December 05, 2008

Thoughts on Black Friday

He died for a sale.

It has been a week but the past Black Friday still reverberates in the media due to the fact that a temporary worker was killed by a mob of customers.

But hey, what is one trampled worker when it comes to our economy?

And the family of the murdered worker are now suing everything in sight.

For f**k’s sake, what is the matter with these people?

Last week I was listening to the Bloomberg radio program Bloomberg surveillance and one of the guests on the show made the analysis that by next year there will be a copious amount of retail space next year because a lot of retailers will be declaring bankruptcy. So they need to liquidate as much inventory as possible before the creditors get their hands on it. It was his opinion that there was no need to rush out on Friday to take advantage of the sales.

And it appears there is a consensus regarding his perspective.

According to the New York Times, Black Friday accomplished very little.

Retail Sales Are Weakest in 35 YearsRetail Sales Are Weakest in 35 Years

The nation’s retailers turned in the worst sales figures in at least a generation on Thursday, starting the holiday shopping season with double-digit declines across a broad spectrum of stores.

For many chains, the precipitous sales drops that took hold in September and October got worse, not better, in November, despite relatively strong sales in the few days after Thanksgiving.

The International Council of Shopping Centers, an industry group, described November’s figures as the weakest in more than 35 years. Declines were recorded in every retail segment the group tracks, with the biggest coming from department stores, with sales down 13.3 percent compared with November a year ago, and specialty apparel retailers, down 10.4 percent.

Below is an IM conversation I had with a family member regarding that particular development.

Me (10:18:53 AM): was it worth trampling that guy at walmart?
Family Member (10:22:44 AM): yeah b/c you can't really eat a flatscreen.

I wonder what the food riots will bring us.

Monday, December 01, 2008

Real Estate Chatter: Christmas Party Cancellations and layoffs

There has been some chatter regarding a very well known real estate brokerage that is undergoing some severe cost cutting measures for the holidays and beyond.

1. This company is not having a holiday party instead they are having holiday parties. Because of the cost of setting up their usual holiday bash and that it would be in bad taste to have their usual lavish gala, this company has decided that each of their offices is responsible for having their own holiday parties.

2. This firm has already laid off 15 people and if profits do not kick up next year they plan on laying off more people. It is unconfirmed if these are brokers or staff.

3. There is also talk within this company to cut the dead wood by initiating consolidation of certain offices.

Which company is this? The only hints I will provide is that their founder has a size 8 waist, has an unhealthy obsession with Redhook and left the company by riding off into the sunset. Literally.