Cutting their losses: Enter Financial Precrime

No. That's not Tom Cruise. Its AMEX.


It is just not enough for banks and financial institutions to look at the credit reports of customers now it has gotten to the point of statistical precognition.


American Express Kept a (Very) Watchful Eye on Charges

You probably know that credit card companies have been scrutinizing every charge on your account in recent years, searching for purchases that thieves may have made. Turns out, though, that some of the companies have been suspicious of your own spending, too.

In recent months, American Express has gone far beyond simply checking your credit score and making sure you pay on time. The company has been looking at home prices in your area, the type of mortgage lender you’re using and whether small-business card customers work in an industry under siege. It has also been looking at how you spend your money, searching for patterns or similarities to other customers who have trouble paying their bills.

In some instances, if it didn’t like what it was seeing, the company has cut customer credit lines. It laid out this logic in letters that infuriated many of the cardholders who received them. “Other customers who have used their card at establishments where you recently shopped,” one of those letters said, “have a poor repayment history with American Express.”

Remember the movie Minority Report? Well this Amex’s version of Precrime. They are looking at everything from credit reports, shopping habits, any data that produces a number and they are putting into these matrices in order to determine who is a future risk.
People, this is seriously f**ked up. What it means even you do everything right within your finances, you could still be penalized just because of where you shop.

The question, then, is how much of the data they can use before spooking their customers. Kevin D. Johnson, a 29-year-old Atlanta resident who runs a marketing and communications firm, received a letter from American Express last October saying that his credit limit was being lowered. One reason was that other customers who had used their cards at places where he had shopped were late in paying their bills.

The company couldn’t — or wouldn’t — tell him which charges had met with its disapproval. Frustrated, he told his story to the local newspaper and on “Good Morning America.” He also began documenting his experience on newcreditrules.com, where he posted the names of all the merchants he patronized, in the hope that other American Express customers would cross-check his list with theirs and solve the mystery.

Want to know where this guy shopped? out.

I have no idea why Walmart is considered a bad place because everyone shops at there and Amazon is an e-commerce instituiton. As for Mcdonald’s I guess people working on Wall Street should avoid going there for lunch.





It isn't just AMEX getting into the Dead Zone.

Banks Foreclose on Builders With Perfect Records

TEMPE, Ariz. — Dave Brown, one of this city’s best-known home builders, had kept his head above water through the housing downturn, not missing a single interest payment on his loans.

So he was confounded a few months back when JPMorgan Chase, spooked by the decline in his company’s revenue, suddenly demanded millions of dollars in additional collateral to continue carrying loans on his projects.

By October, unable to come up with the money, Brown Family Communities decided to shut its doors after 33 years in the business.

“They treated me like a deadbeat who missed his car payment,” said an embittered Mr. Brown, 76. “They wanted their money now.”

After riding high on one of the greatest housing booms in American history, the nation’s home builders today face a devastating reversal of fortune.
Although the housing crisis is nearly two years old, many banks had refrained from cracking down on small home builders.

They are starting to do so, and a wide swath of the industry could be forced out of business in the next few years. The trouble is concentrated especially in the Sun Belt, the scene of so much overbuilding.

Not only have new-home sales stagnated, but builders confront a rising wave of foreclosed properties coming to market at prices below the cost of building a new home. To move houses, they have to mark them down to less than the cost of construction.

The convergence of these problems is bringing many small and medium-size builders — who account for about 70 percent of new-home construction in the United States — to their knees.

“The reality is, we’re seeing conditions in home construction and home finance that are the worst since the Depression,” said Steve Fritts, associate director of risk management policy at the Federal Deposit Insurance Corporation, the government agency that insures bank deposits.

Life has been difficult for large publicly traded home-building companies as well, where stock prices have collapsed and construction sharply cut back. Yet for now, many of the public companies can meet their obligations.

“They’re better capitalized and they have cash on hand,” said Ivy Zelman, a housing analyst. “They’re in a much better position than the private builders.”
No hard count exists of precisely how many builders have gone out of business since the downturn began. According to an estimate by the National Association of Home Builders, at least 20,000 builders — about a fifth of the total nationwide — have closed up shop in the last two years.

With the industry still owing hundreds of billions of dollars in loans made at the market peak, many more face insolvency in the coming months and years. “Probably north of 50 percent will fail,” Ms. Zelman said.

The risk analysis groups of these banks are working overtime and have determined that these private estate developers are in a high risk demographic, even if they are making their payments on time, banks want to get out their money ASAP. All major banks have real estate appraiser groups that do an intense scope of work of the real estate markets. From they gather the odds are not in their favor of these particular developers. So rather than wait for the keys to be turned in, they are cutting to the chase.


“The behavior of the banks is unprecedented,” said Mick Pattinson, a home builder from Carlsbad, Calif. who has organized a national coalition of builders to draw attention to what they regard as unreasonable treatment. “Yes, there was overleveraging in the industry. But the aftermath doesn’t need to have been as brutal as it has been.”

Some experts defend the banks, saying they are starting to do what is necessary to come to grips with the turmoil in real estate. For months, they have been under pressure from federal bank regulators and their own shareholders to curtail lending to a faltering industry.

“The lenders are not operating irrationally or unfairly, generally speaking,” Mr. Fritts said. “They have to protect themselves.”

It is not just real estate developers, it is also the mortgage industry.

http://blogs.wsj.com/economics/2009/01/27/a-look-at-case-shiller-numbers-by-metro-area-5/


Costs and Tighter Rules Thwart Refinancings

That was the case when the government, through its Troubled Asset Relief Program, started pumping money into banks with the goal of shoring up their balance sheets and spurring lending. And it appears to be happening again as the Federal Reserve buys up mortgage securities. The Fed is pushing down interest rates, but that has not been enough to bring the housing market back to life.

While rates are falling, borrowers face higher costs every step of the way, from rising fees for mortgage insurance to added costs that drive up the mortgage rate. At the same time, lenders have become more cautious about whom they will lend to, as more people lose their jobs, watch their incomes decline and fall behind on their bills.

One of the biggest stumbling blocks for many people is their plunging property values, which have erased all or most of the equity in their homes. Others cannot meet the increasingly stringent credit requirements, which either disqualify them or increase their costs.

“Refinancing is a very difficult proposition right now,” said Mike Stoffer, president of Stoffer Mortgage in North Canton, Ohio. “The loss of equity and tighter credit standards are making it difficult for a lot of people to refinance.”

Recently I spoke to an appraiser about the business and he said that although he was really busy dealing with refis, banks are tightening the vise around everyone's balls because of the chicanery of the past.

He told me one story about a massive case of mortgage fraud that involved a loan officer where a bunch of homes got mortgages. One problem. These homes were just shells. So it should not be a big surprise why lenders acting as if it is 1984.


The borrowers have also changed.

Major banks and mortgage brokers agree that the number of qualified borrowers has dropped significantly. By some brokers’ estimates, only 30 percent of applicants in certain markets are actually closing on their refinancing applications. In contrast, in the first half of last year, about 60 percent of applications were approved, according to the Mortgage Bankers Association.

And only a select few borrowers with pristine credit can secure the most attractive rates: for the week that ended Jan. 15, rates on a 30-year fixed mortgage sank to 5.12 percent, the 11th consecutive weekly drop and the lowest rate since the big mortgage financer Freddie Mac began tracking them in 1971.

Earlier in this decade, during the real estate boom, many borrowers purchased their homes with little or no money down, meaning that even a small drop in value could wipe out any home equity. Even homeowners who initially put down 20 percent or more have seen the value of their stake fall. As a result, many homeowners need to come up with a pile of money, essentially a new down payment, to raise their equity to at least 20 percent. Otherwise they have to buy private mortgage insurance.

Alternatively, consumers could just buy the mortgage insurance. But getting the insurance is no longer simple. Private mortgage insurers, which incurred large losses when the housing market collapsed, have become much more selective. They also are charging more for their service. Even if a borrower does qualify for insurance, the increased costs often wipe out any savings from refinancing, mortgage brokers said.

There are a copious amount of borrowers with f**ked up credit scores. It has gotten to the point that people won’t be able to get a cellphone contract unless they put up a kidney for collateral.


I have also heard some really harsh chatter regarding the insurance industry. Since Katrina the insurance industry has been in free fall.

And with this economic crisis, insurers are reviewing their clients and compiling a cut list of who to get rid of. Because of the lack of liquidity and the frozen credit markets, there are is no cash in the kitty to cover anyone files a claim.

Here’s my take on what you can do.

Limit the usage of your credit card particularly to places that are listed on this list. Which ones are the “bad places? Some? All? I have no clue.

Budget and use cash wherever you can. Since cash can't be tracked, it will be harder for someone to create a risk analysis profile of your spending habits. It will also force you to become more frugal.

If you see some major league bulls**t on credit card, call them out. You are still the customer and if you have a grievance, let them know. You have nothing to lose.

Make every effort to driver carefully, in fact I would go as far as reviewing the New York State Driver’s manual.

And become the safest driver you can be. Cities and towns are in dire need of cash so they are going to be looking at the authorities to lay out the tickets on any moving violations. This is bad because it means more money to pay tickets and higher insurance or worse no insurance.

If you have someone in your household who has an established record of reckless driving take the keys away from them. If they do not like it, tell them to get their own car and insurance.

Teenagers with freshly minted licenses should be put on a very, very tight leash. If they bitch and moan, explain to them that by laying down these restrictions it will lower the changes of getting tickets or accidents.

For those of you looking for refis and are getting hit by unnecessary fees, keep plugging away. Especially if there is no justification for those fees.

The old adage of an ounce of prevention is worth a pound of cure no longer applies. Everyone is scared and so emotionally hijacked that they are not just looking for monsters under the bed, they are looking for the kitchen, bathroom and living room.

Roll Call: What the hell edition extended ! Amy Sedaris on crack

This is from the Angry Asian Man. Below is a description.

A reader named Gloria sends in this juicy little scan... She informs me that actress/author/comedienne Amy Sedaris did a show last week at Haverford College. Gloria's brother (who happens to be Chinese American) got a copy of Sedaris' book I Like You: Hospitality Under The Influence signed for her.

The above scan is what she apparently inscribed on the inside of the book. Yes, you're reading that right. As if "Ching Chong" wasn't enough, the rudimentary buck-toothed chink-eyed caricature is sort of icing on the racist cake.

What the hell, Amy Sedaris? Is that supposed to be clever? Are we supposed to write that off as "quirky"? I've never been a huge fan of hers... but I've never disliked her either. That has changed. I have to wonder what Gloria's brother thought when she handed this back to him. Not cool. That's racist! (Thanks, Gloria.)

The reaction I got from my inner circle was varied.

One family member stated its okay since she is single, most likely will never breed and the line end with her. A friend stated that maybe considering her work perhaps she was acting in character. My response was that sure if she was acting like a racist douchebag.

I have no problem with racial comedy as long as its funny like Chappelle and Pryor. But this is not comedy.

Roll Call: What the hell edition!

This isn't how the President feels. This is how the people feel.

Greetings folks, its Friday and time for another roll call. For my new readers it is just a selection of this week's stories along with my words of wit.

Yes, Wall Street is getting hammered but it seems like yesterday with all the bonus money being thrown around.

What Red Ink? Wall Street Paid Hefty Bonuses

That was the sixth-largest haul on record, according to a report released Wednesday by the New York State comptroller.

While the payouts paled next to the riches of recent years, Wall Street workers still took home about as much as they did in 2004, when the Dow Jones industrial average was flying above 10,000, on its way to a record high.
Some bankers took home millions last year even as their employers lost billion

This has not gone unnoticed by POTUS.


Obama Calls Wall Street Bonuses ‘Shameful’

“That is the height of irresponsibility,” Mr. Obama said angrily. “It is shameful, and part of what we’re going to need is for folks on Wall Street who are asking for help to show some restraint and show some discipline and show some sense of responsibility.


“The American people understand that we’ve got a big hole that we’ve got to dig ourselves out of, but they don’t like the idea that people are digging a bigger hole even as they’re being asked to fill it up,” Mr. Obama said, adding that “there will be time for them to make profits and there will be time for them to make bonuses. Now is not that time.”

What I want to know is tax money being used for bonuses?

Mr. DiNapoli’s report was compiled based on the annual December-January bonus season, mostly through personal income tax collections. In an interview published on Thursday, he said it was unclear if banks had used taxpayer money for bonuses.
“The issue of transparency is a significant one,” Mr. DiNapoli said in the interview, “and there needs to be an accounting about whether there was any taxpayer money used to pay bonuses or to pay for corporate jets or dividends or anything else.”

If I f**king hear another person say that bonuses are needed to keep talent from leaving I will f**king scream. No one is going to leave. There are no jobs out there. You can buy people with a crust of bread right now.

Just look at this Gawker link,

People are freaking the f**k out.

I pray that non TARP money was used for these bonuses, because if it comes out that was the case, there is going to be a revolt amongst the proletariat, correction, it won’t be a revolt, it will be a beatdown. And say goodbye to any chances for another bailout.


Isn’t this sad, Poor Bernie Madoff is having a hard time adjusting to house arrest

"I'm a prisoner in my own house!" Madoff fumed. "I can't go anywhere! I'm stuck here all day!"

You want to get to get out of the house? Be my guest. There are three hots and a cot waiting for you at Rikers. Unfortunately your safetly may not be guaranteed.


Of course Bernie is not alone. Apparently he has a lot of illegitimate offspring out there also cause there in their own ponzi scheme mess.


Troubled Times Bring Mini-Madoffs to Light


One of them was by a douchebag named Nicholas Cosmo who was running a ponzi scheme worth about $370 Million dollars.

What I find f**ked up is that first of all this guy was in the penn for securities fraud and one of the guys that worked for him was one of his cellmates who was in for dealing H.

This douche bag’s job was to find victims for his scheme which included 17 Marines serving in Iraq. Looks like Cosmo and his employees are going to learn very quickly that it is not a good idea to f**k with a Marine.

However, I think this is a clear example that when it comes to investing, due diligence is the order of the day.

Have an excellent Super Bowl folks!

Peaceout at the Plaza

It appears that peace has come to one particular hotel condo conversion

The Plaza Begins Settling Its Penthouse Problems

This is from the City Room

Plaza and Penthouse Buyer Settle Dispute

The story is that Andre Vavilov, a Russian oligarch, went crazy over penthouses at eh plaza and dropped a huge deposit for the $53.5 million dollar units. Now apparently his girlfriend put the kibosh on the deal because she hated it.

Anyways there was a lot of legal d**k slamming over getting the deposit back but now everything is cool.

Next time show the girlfriend the place first before buying.

Why use a shredder when you can use your bare hands?: FACTA

Awhile back I did an entry on FACTA, The Fair and Accurate Credit Transactions Act

Below is another link to the
Disposing of Consumer Report Information? New Rule Tells How

Especially during these times, it is imperative to know your rights and to know what is required by people who handle consumer information.

It would not surprise that someone at CH is getting fired over this and I would not be surprised to see an army of lawyers knocking on their doors.

Why use a shredder when you have your bare hands?

Gothamist posted this story from Eyewitness news.

It's a Citi Habitats client's worst nightmare—and a dream come true for identity thieves. WABC 7's Eyewitness News discovered "Scores of documents"—driver's licenses, credit reports—"were found strewn on the street for anyone to pick up." Told of finding her info on the street, one woman said, "Just in the gutter? My life was in the gutter. That's nice" Though businesses are required to shred such sensitive material, Citi Habitats' West 82nd and Columbus location "accidentally" left 2006-2007 client documents on the street during renovations, and a statement said, "We took immediate steps. to investigate and remediate this isolated incident, and are notifying those customers whose information may have been compromised." But WABC 7 found in spite of Citi Habitats' "remediation," "We were still finding documents a block away a full eight hours after the clean up was over."

Unfortunately, a lot of rental firms go through a high turnover rate in terms of agents and clients who come in. Which leads to a lot of excess paper. I knew of one manager of a rental firm who justified not having a shredder when agents could just tear up the information with their hands.

Awhile back, I did an entry on the responsibilities of an agent in protecting their clients' information. I will have to look for that. In the meantime, trust no one.

I Love You Man!

Miserly Bastard,

Thank you for your response. I appreciate what you said and I hope you can appreciate what I have to say too.

No offense, but you have no idea what you're talking about.

If you have bothered reading my posted, I stated upfront about my lack of knowledge in the field of firearms, self-defense and law and I made it abundantly clear that this was just my opinion.

Your comments about caliber choice, for example, demonstrate your ignorance about guns; the single most important factor in "stopping power" is shot placement--which equates to operator skill. All else is secondary.

You are correct. I am ignorant about guns which is why I have personally consulted with people who are experienced in firearms which includes people in the military and law enforcement. These are their words, not mine.


The decision to buy a gun is far easier than the liberal hand-wringing you prescribe.

It is not the decision I am talking about. It is the aftermath of using a firearm.

1. Buy a gun because the police cannot protect you or your family, in your moment of greatest need, and because a firearm is the single most effective means of employing lethal force in self-defense. I pointedly note that your list of people to talk to omitted, say, "the woman who was repeatedly raped while waiting for 911 to come" or "the family of the girl who was killed by the stalking ex-boyfriend."

I want to clarify that the point my entry was not about why or why you should not buy a gun but what the implications and consequences of using one are.


As for this sentence.

I pointedly note that your list of people to talk to omitted, say, "the woman who was repeatedly raped while waiting for 911 to come" or "the family of the girl who was killed by the stalking ex-boyfriend."

You are intentionally utilizing an emotionally hijacking statement in order to cover up the fact your argument that has nothing to do with have I stated. Regardless of whether a person has used a gun to deter a rapist or a stalking ex-boyfriend, that person is going be dealing with police officers, lawyers and doctors.

The people I list are the ones you should talk to in order because they will be the ones you will most likely interact after using a gun in self defensive situation so it is best to be familiar with them before hand.


2. If you buy a gun, get trained on gunhandling, tactics, and deadly force law, from a reputable shooting school such as Gunsite or Thunder Ranch. The law of deadly force is very simple: you must be in reasonable fear of imminent bodily harm or death, or be acting to protect an innocent third-party from the same. It's not a hard concept.



3. Finally, commit to yourself that having a gun (and the knowledge to use it), is no substitute for good judgment. In other words, even though you own/carry a gun (or perhaps BECAUSE you own/carry a gun), you must strive to avoid doing stupid things, going to stupid places, and hanging out with stupid people.

It's really that simple.

No. It is not.

I do concur that gun training is essential for anyone who own a gun in order to use it and maintain it properly, however that is only half the battle. Any gun owner worth their salt needs to understand the laws of their state pertaining to use of deadly force.

As I said before, I am not a lawyer, but it would not surprise me if some if not all states have different criteria for what it means to be have a reasonable fear of imminent bodily harm or death, or be acting to protect an innocent third-party from the same.

That is why it is imperative that all gun owners should not only educate themselves on these laws but also how they are enforced so they do not end up getting in a legal quagmire.

Remember Mr. White? From what I have read of what occurred that night he must have been scared as all hell when being one of the few black families in town that is suddenly confronted by a gang of white youths who have bad intentions for his son. I am sure he felt that he was acting to protect his son. However because those teens were outside of his home and had not gained unlawfully entry into his home is why he was convicted. However, it would not surprise me that if this situation occurred in another state, Mr. White would have never been charged.


Just re-reading your post amazes me at naive you are.

You would have people think about all of the amorphous legal consequences (e.g., grand jury investigation, dealing with first responders, etc.) and pseudo-psychological consequences (e.g. PTSD) following a shooting, and none at all about actual survival.


Newsflash: in order to worry about the second order consequences you name, you first have to survive. This is why you buy a gun.

Awhile back I was having a discussion about self-defense with my martial arts teacher, I asked him about the issue of getting sued after defending yourself from an attacker. His response was simple. If you are attacked, let yourself get killed, that way you won’t have to worry about getting sued since you will be dead.

The point of that statement from my teacher was the last thing you want to think about are lawsuits when your only focus should be dealing with the situation at hand if you are attacked. When faced with a life and death decision you must be completely focused on whatever you are doing to ensure your survival.

However if you survive after using a firearm in self defense, the ordeal is not over. The legal system in our counter is designed to ensure that the justifiable use of deadly force is deemed justifiable. That means all participants are going to go through the entire situation with a fine tooth comb. And there may be others who attempt profit from the situation at your expense.

Wouldn't it best to know what your rights are after a self defense situation when facing a police officer? Wouldn't you want to train yourself to prevent yourself in making statements that could be construed as incriminating? Wouldn't it be a good idea to talk to a lawyer in determining how to protect your assets from an attacker or attacker's family if they try to sue you? These are the types of issues you want to deal with sothat you do not have to be distracted by them if you are ever in a position to defend yourself.

Your post is also riddled with errors and canards, such as "semi-automatics are not as reliable as revolvers," or ".45s have more stopping power than 9mms" or "you will be traumatized and guilty after a shooting."

These statements are either flatly incorrect, or gross overgeneralizations. Modern semiautomatics like Glocks are clearly the gun of choice; caliber selection has far less importance than training, and merely perpetuates the myth that "gear matters"; and many people--including a number that I know well--have been involved in righteous shooting w/out any adverse psychological consequence.

I do stand by the statement regarding revolvers and semiautomatics. I once did a ride along with a police officer that told me that you could put his .38 revolver in a bucket of syrup and it would still work but you would not dare do that with a semiautomatic pistol.

As for your statement that “Glocks are clearly the gun of choice;”, for a person who prides themselves on their expertise of firearms, you should know that picking a weapon is all about personal choice. Some people prefer a Walther P22 and others of fans of the M9.


Whether done in self defense or otherwise taking a human beings life is not a happy occasion. A person taking another person’s life it is going to have an emotional impact on their mental state. I have a relative who did a stint in the military. At one point during his tour of duty he served under a man who had a special forces background. He admitted to my relative he still had to deal with the occasional nightmare due to his experiences.

This is a man who put his life on the line for God and Country. It is because of people like him that we are able to live freely in this great country. Unfortunately, the price he has to pay is dealing with the memories of getting rid of all those tangos.

If men of his level have to deal with these issues, it is highly likely that the average human being has to deal with them too.


You really should stick to blogging about real estate.

Unfortunately guns have a lot to do with real estate. Especially people now stocking up in fear of things to come.

I have to say I am very surprised by your reaction Miserly. It is quite obvious that I am not anti or pro gun. All I am presenting is my opinion on how people should educate themselves when buying a gun.

Getting her Storey Straight

It maybe a dying medium but there is nothing like seeing your name in the paper. Even if it is an alias.


When I was I contacted by Samantha Storey for her article on real estate blogs I was given ten questions and submitted to her 5 pages of answers which resulted in the following:



Two paragraphs near the end of the article.

For 5 pages of answers I should be annoyed right? This is no way to treat the Grunt right? Actually I am not and the following quote from William Strunk will tell you why.

Vigorous writing is concise. A sentence should contain no unnecessary words, a paragraph no unnecessary sentences, for the same reason that a drawing should have no unnecessary lines and a machine no unnecessary parts. This requires not that the writer make all his sentences short, or that he avoid all detail and treat his subjects only in outline, but that every word tell.

William Strunk Jr., Elements of Style

The two constraints that a reporter of Samantha’s caliber must be aware of are time and space. As a New York Times reporter, I suspect she had to deal with multiple deadlines since this was probably not the only article she was writing. Therefore it was in her best interest to use her time wisely to determine what to write and how to write it.

Space in a newspaper is a very limited commodity and from my count Samantha wrote about 2155 words in this article. I suspect she had probably had to some major league editing since she was writing about other blogs besides my own. Newspaper reporting is not like blogging due to these and many other conditions. Therefore Samantha needs to make due with what she has. As far as I am concerned that quote from William Strunk directly applies to how Samantha wrote about the Propertygrunt because it reduced aspects of that interview into a tiny yet tasty morsel. Would I have like to have been quoted? Sure. But I am not going to hold it against her because what she wrote did represent my answers to her questions and I am very well aware of the requirements of her occupation.

However I would like to explain my answers in this interview.

Propertygrunt.blogspot.com, named in part for Grunt, a soldier in the G.I. Joe comic book series, is run anonymously by someone in the real estate industry. In an exchange of e-mail messages, he said he had no plans to change the tune or the tone of his four-year-old blog, which gives his perspective of the real estate market as a whole.

Below is the question and answers that refers to my tone of my blog.

3. How has what you write about and how you write about it evolved over the course of running the site? (one blogger I talked to said he started off with a self-righteous tone and then realized it was alienating his readers, for example)

I have been very consistent with misspellings, punctuation and grammatical errors in a lot of my entries. I would not be surprised if some people think I am a reject from an ESL class.

My tone can be quite sharp and it has raised some objections from some of my readers. When I first blogged about the credit crisis, I got one reader who implied a rumble would be the first order of business if we ever met. I also received some objections when I wrote about the bad karma served on a noisy neighbor who became an ex-employee of Lehman Brothers, which was surprising since I made an effort to show compassion. And recently some readers felt I was being too harsh about my criticism of Warren Buffet’s granddaughter.

At one point I blogged about some aspects of my personality and I used a scene from Pulp Fiction and an episode of Dr. Who to illustrate why I write in a certain way. It was important to me that my readers understand that I am not a malicious person but I am human. And just like everyone else, I have my idiosyncrasies. So by now a lot of readers know what to expect from me.

I am definitely aware that my words can draw the ire of others. However, I try not to censor myself in what I write. One of my favorite bloggers was Steve Gilliard who was taken away from us way too early. His resting place is a closely guarded secret for fear that his grave will be desecrated because just as he was loved by many he was also hated by mobs of readers. It is because he pulled no punches with what he wrote and could bring even the strongest man to tears. But from this honesty came great compassion, brilliance and love. That only comes from opening up your heart, which he did.

From NYT

A recent entry, he said, “was about how brokers kept using the word ‘confidence’ after the dismal fourth-quarter market reports.” He lampooned brokers’ use of the word, and wrote seven sizzling paragraphs in boldface capital letters to get his point across.


Once again it is a reference to my entry Broker CONfidence.


The primary focus of her article is that how all these real estate blogs will adapt to this new environment in the post-boom period. Below is Samantha’s exact question and my answer.


7. What is the relevance of the NY real estate blog in a post-boom era? In other words, we all know there is bad news, so how do you plan on going beyond that?

What you are asking not only applies to blogs but also to other forms of media that are getting battered by this economy including newspapers and TV. And I think the answers lies with the King of all media.

Now if you mean by relevance as in why would people read a NY real estate blog when everyone knows that everything has gone FUBAR? It is the same reason why people listen to Howard Stern. Everyone knows that he is going say something offensive, however people still listen to him, even his harshest critics tune in. Why? Because they want to know what he is going to say next.

We all know the reign of pain will be with us for quite awhile yet everyone wants to know how it will manifest itself. What is the real estate landscape going to look like after this correction has ended? What real estate developers will be left standing? Is the end for art and cultural for New York City or is this a new beginning? Is there a way to benefit from the downturn?

There has been a series of falls from grace in the world of the haves and the have nots are being very well entertained. Already 6 years of gains have been wiped out in one year and there have been three suicides of formerly wealthy men because of the economy. One of those who killed himself was Rene-Thierry Magon de la Villehuchet who was not only a victim but also an unknowing participant in the Madoff ponzi scheme. Sonja Kohn, another associate of Madoff, could be joining Villehuchet if the Russian Oligarchs have their way after she lost a couple of billion dollars of their money with Madoff.

This is one of the few moments in history where the people who wielded obscene amounts of wealth are now getting their godsmack. It looks like there is still plenty to go around. In end what will happen to these masters of the universe? Will there be any left? Who will replace them?

There is a guy I knew from college who is now getting his MBA and he is completely freaking out because he has no idea where he is going to get a job after he graduates and he has only finished his first semester. It seems that the city has always bounced back stronger than ever after each economic crisis but this particular downturn is completely different since the foundations of the Island of FIRE (Finance, Insurance and Real Estate) have been torn asunder. Financial institutions like Bear Stearns, Lehman Brother and Merrill Lynch were once icons of Wall Street are now just remembered in wikipedia stubs and facebook groups. In 3 years, where will he and many others who ran to business and law school go? A better question is where are all the people who are graduating now with their MBAs and JDs going to do?

As for why I thought I would not make the cut, it was due to a question we kept going back and forward on which was regarding my anonymity and why I wanted to keep my identity secret and what the risks were. Below was my final response.

As I have stated before, I’ve run a clean blog and a clean life. As far as I know there is nobody out there with an axe to grind. That does not mean they do not exist. It is not as if Shredder and the Foot Clan are out to get me but how people would react to me if they knew who I was is an unknown. That is what I mean by unnecessary risk. I have been very lucky to interact with other real estate bloggers who are quite informative, open and very supportive. Unfortunately if (you) ever read any of the comments on Curbed, there are a lot of irate readers out there.


Would I lose my job? It is a possibility. Will I confirm it? No. Because the worst-case scenario is that I lose my job.

To be honest with you, it all comes down to this: I just like my privacy.

I was quite unsure if this answer would satisfy her editorial requirements and I would not have been surprised if I was cut from the article. Even if I was, I still would not have held it against her. Like, reporters, particular ones for the New York Times have certain obligations to fulfill in order to publish an article.

And for those of you wondering where I got the name Grunt, below are two links that should explain it.

Grunt File card



Grunt Bio


As I stated before, this is sort of a special moment for me because this is the first time I have ever been interviewed for a New York Times article. It is quite significant for me because I was basically raised on this paper.

It does present a question that has been nagging me for quite awhile. What now? What do I do with this blog? Where do I go from here?

That is an answer for another day.

Making the cut

The Honor Guard


Like my reaction to Fedor Emelianenko's over hand knock out of Andre Arlovski, I am absolutely surprised that I was included in the New York Times article titled And the Blog Goes On . I am proud to be in the same company as Curbed.com, Brownstoner.com, UrbanDigs.com, TrueGotham.com and The Matrix .



The people behind these blogs are absolutely amazing individuals not only for providing great information and insight about real estate but the amount of heart they put in when they write. I am also very happy that these particular blogs are getting the exposure they deserve.

Although I was interviewed for this article, I was unsure if I was going to be included in the line up which I will explain later in a future entry. I realize this is not such a big deal especially with what is going on in the world, but the fact I am mentioned in a New York Times article is quite humbling. It is nice to have a little recognition.

Samantha Storey has written an excellent article regarding the state of the real estate blog in the current market climate and in my next entry I plan on elaborating further on my response which you will notice was quite succinct. There is a lot more behind what she wrote about me that I would like to explain however I want to make it clear, I am quite satisfied in what was presented.

In the meantime, for those of you who are new to the Propertygrunt below are a list of entries of familiarize yourselves with I will start off with the one that was mentioned in the article.

A recent entry, he said, “was about how brokers kept using the word ‘confidence’ after the dismal fourth-quarter market reports.” He lampooned brokers’ use of the word, and wrote seven sizzling paragraphs in boldface capital letters to get his point across.

Broker CONfidence


Here are some recent ones.
Know your role and shut your mouth.

A blizzard of falling knives

Jim Cramer is a douche bag


Another great moment in real estate marketing

Another great moment in real estate marketing


WHAT THE HELL?


All eyes on NYU

This is my Scarsdale Coverage


BREAKING NEWS!: SCARSDALE IS F**KED!


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


Scarsdale passes gas



Queens or Scarsdale Part 2

Queens or Scarsdale Part 3: The Final Countdown




Below are my oldies yet goldies

Holy Grail? More like Holy S**t


Holy Grail? More like Holy S**t Part 2


Poachers beware: I will beat you with a chair

WHEN THE GUN MISFIRES: DISASTERS THAT OCCUR IN OPEN HOUSES


Thanks again for coming by. I am switching the comment sections so it allows easier access so feel free to comment.

Crime: There is more to it than pulling the trigger.

DISCLAIMER: I am not a lawyer nor am I an expert in firearms or self-defense. The following is just my opinion. This entry is only for information and entertainment purposes.

This is one of the comments from Miserly Bastard

1. Own firearms, and know how to use them well. The Jews for the Preservation of Firearms Owneship have the right mindset. I distinctly remember my first trip to Gunsite, where I was taking their introductory 250 pistol course. A carbine course was simultaneously running, and it was the oddest sight to see this orthodox Jew eating his kosher meal at the lunch table, wearing BDUs, with an AR15/M4 carbine next to him. We jokingly called him "Benny the militant Jew", but I basically understand where that guy was coming from.

I am not disagreeing or agreeing with Miserly Bastard. I am just adding my perspective.


“Just buy a gun” is a response I often hear when the subject of self-defense comes up, however the decision to own a firearm is not to be taken lightly. The primary purpose of a firearm is to kill. Everything else is secondary. Therefore one must fully understand the responsibilities of owning a firearm and the use of deadly force.

If you make the decision to own a firearm, whether it is for home protection or for a hobby, I would recommend talking to 6 people before purchasing it. A defense lawyer, a prosecutor, a police officer, a judge and a doctor

1.Firearms expert

A firearms expert, preferably somebody certified from a reputable organization, will play a key role in providing you the proper information for purchasing and handling a gun. A fire arms instructor will not only teach you how to safely use a gun but also how to properly maintain it and keep it safe in your home. Through their tutelage you will learn about differences about between a 9mm and .45 caliber(One has less stopping power than other) and you will also learn about advantages and disadvantages of a revolver (it is simpler to use and has greater reliability however there is a limitation on how many rounds it can carry) and a semi-automatic pistol (carries more bullets, however reliability is in question depending on the model and how well it is maintained.)

It is imperative that you get proper training from a certified expert in order to prevent the following from occurring.


In a demented way it is rather humorous, however in retrospect an innocent person could have been wounded or killed in these incidents.


2.Police officer

If you discharge a weapon in self defense the first person that will be on the scene will be a police officer. It is imperative that you understand the role of the police officer in a shooting and the investigation process so that you will able to be prepared to properly interact with them.

From what little I do know about police procedure, so please don’t quote me on this, when police arrive on the scene of a shooting they will most likely have their weapons drawn and are going to secure the area to ensure the safety of civilians in the area and themselves. That means anyone with a gun and does not have a badge better do as they say if they want to live.

Sounds pretty harsh right? Actually from the police officer’s perspective it makes perfect sense. Police officers only get whatever information is available from dispatch so when they hear the word “shooting” upon arrival their primary obligation is to secure the area and to establish a safe zone. Initially they are not interested in what happened, they are just interested in ending the body count.

So even if you are involved in a justifiable use of deadly force, it is in the best interest of breathing to comply with whatever demands the police make and if it means being handcuffed and put in the back of a police car, so be it. Let them do their job to establish protective measures to ensure the safety of all involved. Upon completing that phase they will begin their investigation and will be able to determine what happened.

By talking to a police officer, you will be properly prepared to communicate them if you are put in a position where you need to use deadly force to protect yourself. The police officer will also give a very sobering perspective on the consequences of gun use because they are the first responders to these types of incidents and will be able to relay the realities of using a firearm on another human being due to their experiences.


3.Defense Lawyer

In my opinion it is better to talk to a defense lawyer before buying a gun rather than after you had to use in a self-defense situation because they will prepare you to deal with the legal consequences of using a firearm.

The defense lawyer will be able to prep you in what can and can’t do in terms of self-defense, they will also educate you in how to communicate to law enforcement authorities and how to protect yourself from making any incriminating statements

It is likely you will be sued, especially if the assailant is still alive and kicking after you have discharged your firearm. They may not be able to function properly so they will look to you to provide the proper care for them.

Berhard Goetz is an example of legal recourse taken by a criminal. Mind you, I am not condoning what he did, in fact even with the little knowledge I know about firearms I realize that he was very lucky he did not kill any innocent people that day. Even though Goetz got off with 8 months he was successfully sued by one of his assailants for $43 million, which he has not paid a dime.

The defense lawyer will provide the guidance you need to protect yourself during a civil trial and make recommendations of what legal measures you should take, like purchasing liability insurance.

4.The Prosecutor

Why would you want to talk this person? Because of you kill someone, even if is justifiable, a prosecutor will have to determine whether to charge you with a crime. Even if a shooting is justified, if you used an unlicensed firearm, it is most likely that they will prosecute you because you still broke the law.

5.The Judge

If you go to trial, this is the authority that will play a huge role in your fate especially if it is not a trial by jury. That courtroom is the judge’s domain and they can pretty much do what they please. By learning more about the judge and how they work, you will be better prepared in working with them. You do not want to work against a judge because if that happens then nothing is going to work in your favor.


6. The Doctor

I would recommend seeing two doctors. The first is a doctor that specializes in trauma particularly ballistic trauma AKA gunshot wounds. They will show you in graphic visual detail of what a bullet does to human tissue. From the trauma doctor you will learn terms like hydrostatic shock, assessment of severity, tension pneumothorax, exsanguination, hypoxia, acquired brain injury and paralysis.

If you are lucky the doctor will introduce you to patients who have survived or expired from these injuries and you can see up close what a bullet does to a human being.

Why pray tell would you subject yourself to a process that would make you vomit from even the thought of eating? Because this is what guns do. This is not Star Trek, you can’t set a .45 Smith and Wesson to stun, once you aim it at a human being and pull the trigger, that bullet will induce a tremendous amount of damage. And whether they survive it or not is up to God.

The second doctor you are going to need to speak to is a psychiatrist. Even if the courts find you legally justified in taking another human being's life, even if society tells you its okay even if your rabbi, clergyman, priest, guro says it's ok, if you are normal human being, it's not going to be okay with you.

Post traumatic stress disorder will make itself know in your daily life, even in your sleep. The somatic marker of that incident is going to be drilled in nice and tight in your memories.

Talking to a psychiatrist will give you an idea of what you will experience after shooting a weapon in self defense. Right now a high number of US soldiers are losing their battle in dealing with PTSD. These men and women are trained to fight and survive in combat situations and if they are having problems with PTSD you don’t think you will?

Now of course you can ignore what I said about firearms and cut to the chase and get yourself an equalizer. For your sake I hope you do it legally.

However, it is imperative that you need to know what your rights are in owning a firearm,when to exercise them and the implications of using them in order to avoid tragedies like the one that occurred in Long Island on August of 2006.


John White shooting of Daniel Cicciaro Jr. If you want full details of what happened go to this link.



This is a simplified version of the events that led to that shooting: John White’s son was at a party when someone accused him of acting in an improper fashion to one of the girls. Adding more tension was that the girl's brother was also present. John White's son wisely left the party while a group of boys including the brother of the girl, unwisely followed him home.

When his son arrived at home and alerted his dad of the situation, his father's response was to arm both his son and himself with firearms. At one point he walked out of his house and ordered the group to leave. Daniel Cicciaro Jr lunged for the gun, which was an unlicensed, a struggle ensued and the gun went off killing Daniel Cicciaro Jr.

The whole thing is a horrible tragedy and I believe that if Mr. White had taken certain measures it could have been avoided or at least Mr. White would not face any legal trouble.

What he should have done was call the police, whipped out the video camera and recorded the racist rants of these douchebags and make sure that 911 was still on the line so that there could be an audio record of the incident. As soon as the cops arrive, burn a video copy for them and have the kids arrested.

Every lawyer in America that is licensed to practice in New York would be busting down his door to represent him and he would have been able to sue the families involved back into the stone age. No one would have been killed and Mr. White would have been able to retire from the settlement and send his son to Harvard.

Now if it had gotten to the point that these douchebags initiated a breach that would put Mr. White and his family or his property in harm’s way, yhen Mr. White would be justified in the use of deadly force through the Castle Doctrine. (Please consult a lawyer regarding this law because it varies from state to state.) In other words if this group had gained unlawful entry into his home then Mr. White would have every right to neutralize the threat with a licensed firearm.

Mr. White was convicted however he received a suspended sentence, despite that being free you can tell from the pictures below that this is a man with a very heavy heart. His family has also been deeply affected. The community he lives in is further polarized and Mr. Diciaioro is without a son.







Now before some of you start screaming that I am some bleeding heart liberal and that I am an agent of the new world order out to use propaganda to disarm red blooded Americans, I would like to present these two stories about firearms.

There is a story I once read about Pearl Harbor when the Japanese were planning their attack. At one point they were considering launching an invasion into California after Pearl Harbor but the idea was quickly vetoed because their research indicated that every 2nd home in California had at least one rifle. The Japanese Imperial Army would no doubt face strong resistance.

From that same article I learned of some interesting facts regarding Switzerland during World War II. Even though Switzerland was neutral throughout World War II, Hitler was actually considering invading it just for the hell of it but it was pointed out to him that although the Swiss seemed like a bunch of wussies, the majority of the population were part of a militia and even those who retired from the militia would still be armed. And because of the unforgiving weather and terrain, the Swiss were known to have 6 months of supplies stocked up for emergencies. In words combined with the harsh environment and the weapons and training of the Swiss militia, the Nazis would be facing a quagmire. So Hitler abstained from invading the Alps.

I am not taking sides here folks. When I say the primary function of a firearm is to kill, I am not passing judgment or demonizing them, I am saying that is their function. As those stories have demonstrated, I am very well aware that firearms, when utilized properly, can have a strong deterrent effect against certain evils in the world but they can also the cause of great tragedies. I am just making every effort to present the implications of owning and using a firearm in self-defense. The action of pulling a trigger on a human being is quite simple. The consequences are far more complicated. If you are not properly prepared to deal with those consequences, it will be devastating not only to yourself but your family, loved ones and innocent people.

Crime Time

It could get this dramatic.


Real estate and crime are always connected. A high crime rate can lower real estate values and a low crime rate usually raises it. Depending on who you are and what your objectives are, that could a good or bad thing. For instance, if you your trying to sell and your neighborhood is considered the closest thing to the Gaza strip, it is going to be a hard to close a deal. However, if you are an investor in distressed properties and you see indications that a neighborhood with a really high crime rate is about enter the initial phase of gentrification, then it would be to your advantage to buy the property while prices are low.

It would not be an exaggeration to state that there is a possible return to the bad old days the 70’s. Already bank robberies have gone up, a there have also been a series of high profile muggings in the West Village.

I have been in the process of putting together a series of entries on dealing with crime and have decided to use comments from my reader, Miserly Bastard who presented his opinions on Vincent Who. Feel free to read them if you want.

He makes some very important points about safety that I think that people should take heed especially during these times. I don’t agree with all of them but I think they are of merit and I would like to elaborate on them.


Unfortunately there are nearly an infinite amount of topics one can cover with crime. However, for this particular series, please keep the following two factors in mind.

One of my favorite writers on self-defense is a gentleman by the name Marc "Animal" MacYoung. He does not hold any degrees from Harvard, nor is he someone you see on the talk shows. He is what I call the Eric Hoffer of self-defense because he is an autodidactic and he has alifetime of experience dealing with violent situations. As far as I know, he is who he is. The online martial arts community is extremely meticulous to the point of fanatical when it comes to the due diligence of martial arts experts and so far he has passed muster.

What I really enjoy about Macyoung's work is that he takes a very scientific approach on the principles of self-defense. On his website he presents information on the legal and the psychological aspects of self-defense. Self defense is not just knowing how to physically defeat an attacker, but when to employ that technique and understanding the other issues that are associated with self-defense which Macyoung covers with great detail. He is not trying selling his particular brand of self neither defense techniques nor is he promoting that one needs to kick ass and take names in order to survive on street. In fact he is a person who promotes avoidance of violent confrontations when possible. And yes. I will be quoting him through out this series.


One of the topics he recently covered was on stress violence and the economy.

Economy and Stress Violence

It is a simple truth that when the economy is bad, crime goes up.
On the surface one would think: Economic hard times = more robberies and burglaries. Except that isn't the whole picture. In fact, that's just a small percentage of bad economy = more crimes. While 'For-Profit Crimes' (what we call criminal violence) do go up, what goes through the roof are behaviors -- that while illegal -- are not necessarily criminal in intent.

In these economic hard times, you're going to see a lot more of what we call 'stress violence.'

Violence become more common as people's stress level go up. Fights, homicides, rapes, drunk driving, road rage, assaults, domestic violence, ALL go up as people with poor coping skills come under more and more stress. And economic hard times are very stressful.

I do concur with this. Right now people are stressed out their f**King minds and it sure isn’t going to get any better. In fact all indicators show that 2009 is going to be the worse for all of us. Stress violence is unfortunately going top play a key role in our lives.


The New York Times recently an article on teaching children manners and the consequences of not doing so when these children become adults, below are some experts.


Making Room for Miss Manners Is a Parenting Basic

It’s always popular — and easy — to bewail the deterioration of manners; there is an often quoted (and often disputed) story about Socrates’ complaining that the young Athenians have “bad manners, contempt for authority.” Sure, certain social rubrics have broken down or blurred, and sure, electronic communication seems to have given adults as well as children new ways to be rude. But the age-old parental job remains.
And that job is to start with a being who has no thought for the feelings of others, no code of behavior beyond its own needs and comforts — and, guided by love and duty, to do your best to transform that being into what your grandmother (or Socrates) might call a mensch. To use a term that has fallen out of favor, your assignment is to “civilize” the object of your affections.

And of course, one of the long-term consequences of being a rude child is being a rude adult — even a rude doctor. There are bullies on the playground and bullies in the workplace; it can be quite disconcerting to encounter a mature adult with 20 or so years of education under his belt who still sees the world only in terms of his own wants, needs and emotions: I want that so give it to me; I am angry so I need to hit; I am wounded so I must howl.

This type of bulls**t is what New York City particularly Manhattan is well known for. And in the next coming years it is going to be coming out in spades. A lot more people are going to demand “What about me?” “What about my needs?” There is going to more of a “F**k you” attitude going around.

Growing up, I have had more than my fair share of self-entitled douchebags who felt they could do and say what they want because of mommy and daddy’s money. These types of individuals are going to have a lot of company because everyone are hurting right now and these self-entitled individuals are going see that the world does not give a damn about them.

So don’t be surprised about fights breaking out because of the inconsiderate acts of one person or someone getting stabbed for being an a**hole. The sad fact is that the selfish nature of human beings is going to be rearing its ugly head during these times. Add a little stress violence to the mix and things start to get really interesting.

Are they really brave?

For the Brave, the Moment Is Now

I just read the article above and it pretty much confirms what I have heard which is motivated buyers are entering the field.

This is not me raining on anyone's parade. I am just stressing that people exercise some common sense and not get overtaken by irrational exuberance. This is not an environment to flip. You buy now, you are holding onto to that apartment for at least ten years. So better damn well make sure you can afford it. And make sure you have the proper mortgage. Go over a fine tooth comb over what you are considering buying. That means look at every detail, even if it means checking out the neighborhood at night to see how safe it is. You have think like these two buyers.

Barbara Rellstab, a real estate broker and former actress, is expecting a baby in May. She fell in love with the first apartment that she looked at. It is a 1,352-square-foot one-bedroom apartment with a den and a private rear garden on the first floor of an elegantly restored former church at 2056 Fifth Avenue and West 127th Street in Upper Manhattan.

The asking price was $699,000, but she bought it for $9,000 less. The final price was $270,000, or 28 percent, below its asking price as of March 2008. Prices might fall further, she said, but she bought it late last month. “I need the apartment now,” she said.


Some buyers are driven to buy in the current market because they feel rents have not fallen as fast as sale prices.

Two years ago when his lease was up, James Bobrowski, an accountant, looked for apartments with Lawrence Rich, a broker at Prudential Douglas Elliman. But the market was over his head.

With his lease up again, Mr. Bobrowski went looking again and at the end of October signed a contract to buy a one-bedroom apartment in a high-rise at 240 East 40th Street, for $700,000, Mr. Rich said, 5 percent off the $740,000 asking price. He closed last month.

Still, a great uncertainty for buyers in the current market is whether prices will fall further, as Ms. Rellstab fears.

Both of these buyers are in situations where they need to take advantage of the environment immediately. One is expecting a baby and the other is dealing with rents not leveling with a falling sales market. So there is an obvious need to get the buyer's ball rolling. However, buyers are not stupid.


Still, a great uncertainty for buyers in the current market is whether prices will fall further, as Ms. Rellstab fears

They know they are in amidst of a blizzard. So they are at risk at losing money in this market.

So buyers, take your time, this new market will be around for awhile.

Bernie Blinks?

Looks like I was right.

Signs Seen of Possible Plea Deal for Madoff

Meet the new radioactive man

This is Bernie Madoff


Despite playing fast and loose with his mailing privileges. Bernard Madoff is still a semi free man. The question is why? Officially it is because they do not consider him a flight risk.


I understand why certain parties of the government are treating him with kid gloves. Madoff has masterminded a very complex ponzi scheme and he plays a key role in unraveling it. Even though the FBI is working day and night to figure out how he did it, it would not hurt to have his cooperation. There is also an unlikely possibility that his victims will be able to get their money back. So it is to their advantage to keep him as comfortable as possible. Also Madoff has nothing to lose, since well, he’s old.

However, I think there is another reason why they are not giving Madoff 3 hots and a cot.

There are some people who have it in for Bernard Madoff.

Yeah. I know that’s obvious. But let’s think about this for a second. There are two groups investors associated with Madoff, those he ripped off and those who profited from him.

The obviously the people he ripped off are pretty pissed and some of them would be more than happy to see him to have an “accident” However there are others who were ripped off want him alive hoping he will return their money.

Then there are the people who profited from Madoff. Did you hear about one of his associates who is running scared from the Russians she once represented?


Do you think that is the only group of individuals with questionable businesses that invested with Madoff?

Let’s play What If?




What if Madoff was engaging in other illegal activities besides his massive ponzi scheme? It is a well-known fact that the guy is a sociopath so it s not far fetched to think that if he was involved in some type of specialized cleaning service or he helped people play dodge ball with Uncle Sugar. Who is to say that he did not engage in other illicit actives? It is possible that Madoff dealt with certain individuals that make their living in the shadows and they will take measures to remain that way.

Now that is out in the open, why the hell would the government allow this?

If you ever seen any episode of Law and Order one of the best ways for a perp to take a deal is let them feel the heat. If there is a sufficient amount pressure from outside forces, Madoff might feel that making a deal is in his best interests.

If they were to put Madoff at Riker’s, it is possible his survival in general population would be at best questionable. Which means they would have to put him in isolation and even that alone would not ensure his safety. DOC would probably have to amass an army of correction officers in order to protect him and even that is no guarantee he will remain on this plane of existence. Also it means a lot of overtime, which translates to lots money which is hard to come by these days.

If Madoof is in jail and wakes up one morning with a shiv in his skull before the Justice system is able to have crack at him, well it is not going to look very good. In fact it could mean the end of a lot of careers. Why have that liability unless Bernie is willing to man up for a deal?

Since this situation is Madoff’s own doing, let him take the risk and foot the bill. If the unthinkable does occur, it is all on him because he is the one who requested bail. Of course the people who live in his building won't be too happy about that.

Of course this is all just speculation on my part.

Enter the MacGyver era

Soon everyone will be cutting costs with a Swiss Army Knife.

We are experiencing a massive cultural shift in our values. Consumption has now been replaced with the paradox of thrift as more people are cutting their costs and becoming frugal.

I know one person who has a trust fund, yet he buys his clothes at Walmart. A member of my family who proudly shops at Walmart told me a story where she saw a woman walking around in a Walmart carrying a Louis Vutton bag. What was hilarious was this woman was constantly looking around hoping no one would see her.

A lot of people are learning to make do with less than they used to, even those who do not need to. Even rich people in Manhattan are getting on the frugality bandwagon.


Concierges Get New Marching Orders

While residents may not come straight out and ask for reservations at a restaurant with less than ruinous prices, “they might say: ‘We want to go someplace simple,’ ” Mr. Fazio said. “It’s our job to understand that what’s being unspoken is: ‘We don’t necessarily want to drop $200 a person, so please find us that hidden gem of a place that we haven’t been to yet.’ ”

Heidi Horsley, who lives at the Element at 555 West 59th Street with her husband and two children, said, “We’re definitely much more careful on what we’re spending as far as going out to higher-end restaurants and even on how often we go out and where we sit when we go to the theater.”

Residents have also called upon concierge services to find other ways to help them live their lives more thriftily. Ms. Newman of Abigail Michaels said she recently researched corkage fees at upscale restaurants, because residents with wine collections wanted to take their own bottles instead of paying the hefty restaurant markups on wine. (The fees range from zilch to $80, with some restaurants prohibiting bottles that are on their wine lists.)

Ms. Newman said one of her concierges had also been asked to find a reliable shoe repair shop to handle 10 to 15 pairs of designer shoes at a time. “We never got that kind of volume before,” she said. “People used to buy shoes at that rate, not get them refurbished.”

Requests for personal shoppers have also changed. Instead of booking someone for a shopping trip to Bergdorf Goodman, Ms. Newman said, residents “are now shopping in their own closets, so they’re restructuring what they have — maybe taking shoulder pads out of the Guy Laroche suit or hemming that Armani skirt.”

I do not see this trend ending anytime soon even after the economy recovers for the simple reason that people will realize how much they are actually saving by engaging in this lifestyle.

The family member that frequents Walmart made an interesting discovery. A lot of the clothes she bought form Walmart were similar items to brand name retailers like Polo and Land’s end. In others words all these retailers get their inventory from the same place. The reason why their inventory is marked up higher is because of the brand. And even if they are posting lower sales, they are still making a profit because in a certain fashion, the clothing business is similar to Coca-Cola. It is pennies to manufacture.

However there are some people who are having trouble making certain adjustments.






Daddy’s Home, and a Bit Lost

How to spend is a continuing negotiation — one that sometimes devolves into heated discussions, outright arguments and bouts of sulking. Tracey is trying, often unsuccessfully, to spend less on clothing for herself and the children.

“Don’t make me look like a jerk,” she told a reporter, “but I cannot bring myself to buy my children’s clothes at Wal-Mart.”

“But do you have to buy them at Ralph Lauren?” Scott shot back.

The Berrys have been at this long enough to make light of the well-worn nature of their disagreement. “It goes like this,” Scott said. “ ‘How can you complain about me not earning an adequate income, when you can’t control your spending?’ ”
On cue, Tracey chimed in. “And I say, ‘How can you complain about my spending when you don’t have an adequate income?’ ”

Actually Scott can complain because he does have a point. The secret of being rich is very simple. It is not what you make it is what you keep. What she should be doing is aggressively looking on craigslist and ebay for bargains or her children. If she does not have time then her husband can handle those tasks because his plate is not exactly full.


I discussed this article with a family member and stated why don’t they just cut the following expenses in bold that are mentioned in the article?

Shortly after Scott lost his job, the couple replaced their full-time nanny with a more cost-effective au pair and began choosing long-weekend getaways instead of weeklong family vacations. Some expenses, though, haven’t changed: they still shell out for membership at a local country club (“the most modest one in town,” Tracey said); they rented a condo last summer on Block Island; and they continue to pay hundreds a month for soccer, skating, T-ball and karate lessons for the children. They afford these things by dipping into the savings Scott put away during the flush years.

The family member pointed out to me that if they were to cut those activities they would have to move. She stated that those parts of Connecticut like Greenwich, and Darien require a family to pony up the cash for certain activities for their children that includes the karate lessons, soccer, skating and even the country club. In the suburbs, no family is an island. If they want their children to develop properly they need to have their children involved in activities in order to for them to develop socially and to also network within their own peer group. School isn’t the only place they can do that. It also looks good on the college application if a child has focused on one activity since they were children since it shows consistency and commitment.

However this might not be good for the economy.

Hard-Hit Families Finally Start Saving, Aggravating Nation's Economic Woes

As layoffs and store closures grip Boise, these two local families hope their newfound frugality will see them through the economic downturn. But this same thriftiness, embraced by families across the U.S., is also a major reason the downturn may not soon end. Americans, fresh off a decades long buying spree, are finally saving more and spending less -- just as the economy needs their dollars the most.

Usually, frugality is good for individuals and for the economy. Savings serve as a reservoir of capital that can be used to finance investment, which helps raise a nation's standard of living. But in a recession, increased saving -- or its flip side, decreased spending -- can exacerbate the economy's woes. It's what economists call the "paradox of thrift."

U.S. household debt, which has been growing steadily since the Federal Reserve began tracking it in 1952, declined for the first time in the third quarter of 2008. In the same quarter, U.S. consumer spending growth declined for the first time in 17 years.
That has resulted in a rise in the personal saving rate, which the government calculates as the difference between earnings and expenditures. In recent years, as Americans spent more than they earned, the personal saving rate dipped below zero. Economists now expect the rate to rebound to 3% to 5%, or even higher, in 2009, among the sharpest reversals since World War II. Goldman Sachs last week predicted the 2009 saving rate could be as high as 6% to 10%.

As savings increase, economists say, spending is likely to contract further. They expect gross domestic product to decline at an annualized rate of at least 5% in the fourth quarter, the biggest drop in a quarter-century.
"The idea that the American family will quickly spend us out of this recession is a fantasy. It won't happen," said Elizabeth Warren, a professor of law at Harvard University who last month was named chair of the Congressional oversight panel tasked with overseeing the distribution of the government's Troubled Asset Relief Program funds.

The irony is that frugal behavior is actually hurting the economy because no one is spending any money, even when we win we lose. 2009 is going to suck ass.

Broker CONfidence

NSFW for language

Alot of this going around.


Yesterday we got carpet bombed by Q4 market reports on the Manhattan market. If you want more of the gory details go the following link.

I do not have much to say because as far as I am concerned it is more of the same. However I did take notice of the New York Times coverage.

Below are some excerpts from the article.


Striking Declines Seen in Manhattan Real Estate Market

Pamela Liebman, president of the Corcoran Group, a real estate brokerage, said that though the Manhattan market had continued to rise in the past year when most of the American housing market was in decline, it “came to a grinding halt on Sept. 15,” when credit markets collapsed and buyers lost confidence.

“Now we see the effects of buyers sitting on the sidelines, and they will remain on the sidelines until they get some confidence back,” Ms. Liebman said. “A lot of brokers are making friends with lawyers and doctors and all those people who were left behind in the heyday of Wall Street, three months ago.”

Beyond the first quarter this year, assessments varied. A number of brokers said that as sellers cut prices, they will create an opportunity for buyers to get good deals that were unimaginable a few months ago, especially at a time when mortgage rates are falling. Several said they were counting on the Obama administration to bring in a wave of confidence that will change the psychology of the market.

“When the market solidifies itself and everyone feels confident that we are on solid ground, you are going to have hordes of buyers,” said Diane M. Ramirez, the president of Halstead.

Notice a trend here? They are throwing around the confidence word around a lot. Does Halstead and Corcoran get together and figure out what catch phrases they should drop for these articles or they just sharing the same PR firm? Whatever they are doing they should just stop and hire Kelly Kreth because whoever is doing their PR is just phoning it in.

In the 2004 election when John Kerry often cited being a Vietnam Veteran as one of his primary qualification to be President. The Republican strategists took his war record used it against him in what is known as “Swift boating” and used it challenge his war record and make him look like an anti war douche. It obviously worked because Obama is now President.


What Pam Liebman and Diane M. Ramirez are doing, dare I say and I do dare,is a form of Swiftboating. What these two are doing are attempting to connect real estate with consumer confidence and latch onto the euphoria of the incoming Obama administration. I am not sure that is a good idea because even President Obama has admitted he has his work cut for him and that we are looking at a trillion dollar deficit.

Here's my analysis and just to reinforce my points I am going to be writing in big obnoxious bold caps.


CONFIDENCE HAS ABSOLUTELY NOTHING TO DO WITH THE CURRENT STATE OF THE MARKET. WHAT THIS MARKET IS BEING DEFINED BY ARE TWO FACTORS WHICH ARE CREDIT AND LIQUIDITY.

THE ERA OF CHEAP MONEY IS OVER AND WITH THE CREDIT MARKETS STILL FROZEN, LENDERS ARE MAKING TRIVIAL ATTEMPTS TO WARM UP THE MARKETS AND HAVE PROVEN THEIR TRUE INTENTIONS BY SIMPLY HOARDING THE STIMULUS MONEY. IT IS ALSO VERY DIFFICULT TO GET A MORTGAGE BECAUSE STANDARDS HAVE TIGHTENED CONSIDERABLY SO THERE IS NO INCENTIVE FOR BUYERS TO ACQUIRE ONE.

BUYING A HOME REQUIRES OPM (OTHER PEOPLE’S MONEY) AND THERE IS NOT A LOT OF THAT GOING AROUND

THE SECOND FACTOR IS LIQUIDITY OR LACK THEREOF. THE REASON WHY SOME PEOPLE ARE NOT BUYING IS BECAUSE THEY HAVE NO MONEY. EVEN THE PEOPLE THAT THOUGHT THEY HAD MONEY DON'T HAVE IT. THEY EITHER LOST IT IN THE STOCK MARKET, REAL ESTATE MARKET, BOSTON MARKET OR THEY WERE F**KED BY MADOFF. THOSE WHO HAVE LIQUIDITY ARE HOLDING IT ON FOR DEAR LIFE AS A RESERVE FUND BECAUSE THEY HAVE BEEN LAID OFF IT IS THE ONLY THING THAT IS ENSURING THEIR SURVIVAL.

EVEN THOSE WHO ARE LIVING COMFORTABLY AND HAVE PLENTY OF LIQUIDITY AT HAND ARE NOT GOING TO JUMP INTO THE REAL ESTATE MARKET. THEY ARE NOT BLIND AND SEE THE BLIZZARD OF KNIVES FALLING ONTO MANHATTAN AND THEY DO NOT NEED A BROKER TO TELL THEM OTHERWISE. IN THEIR MIND IT MAKES NO SENSE TO BE A BUY IN A MARKET WHERE THE INVENTORY IS RAPIDLY DEVALUING.

BASICALLY THIS IS JUST A REVERSAL OF FORTUNE AND THE BUYERS ARE IN THE DRIVER’S SEAT. INSTEAD OF DRIVING ON THE HIGHWAY, THEY HAVE PUT THE CAR IN PARK AND ARE WATCHING THE MULTIPLE VEHICLE COLLISION TAKING PLACE WHICH IS OUR ECONOMY. IT IS ONLY AFTER THEY SEE CONSIDERABLE PRICE REDUCTIONS AND SIGNS THAT THE CREDIT MARKETS ARE STABILIZING WILL THEY EVEN CONSIDER VENTURING OUT.

SO IGNORE PAMELA LIEBMAN AND DIANA "THE DEAD ZONE" RAMIEREZ. THE ONLY TWO HONEST PEOPLE QUOTED IN THAT ARTICLE WERE THESE TWO INDIVIDUALS

“The worst is yet to come; there is a blood bath coming,” said Matthew Haines, a founder of the real estate site Propertyshark.com who prepared the Corcoran report.

But others worry that the market will need more than psychology to support it. Gregory J. Heym, an economist who prepared the reports for Halstead and Brown Harris Stevens, said that unless the economy strengthens, the weakening job market in New York City could further dampen enthusiasm for real estate. He said the city had lost about 18,000 jobs in the 12 months that ended in November, while city economists are now predicting a loss of 170,000 over the next year or two.

“Each time they update the forecast, it gets worse,” Mr. Heym said.

GOD BLESS THEM FOR STICKING TO THEIR GUNS!