To smoke or not to smoke

Monday, at a regular schleduled Craven County Commissioners meeting we heard from the Chairman of the County Health Board on issues pertaining to second hand smoke. He handed out 3 papers on research that had been performed by the CDC, Mayo Client, and another research medical school whose name I don not remember. All 3 papers presented conclusive evidence that second hand smoke was harmful to those that are subjected to it. On a motion presented by one of the commissioners, seconded, and passed by a 4 to 3 vote a rule will be implemented in November to prohibit smoking in county owned buildings. I personally don't think it is asking to much for someone to go outside to smoke, and respect their right to do so. But the facts are the facts. Second hand smoke is bad for others.

This time its personal

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

Martin Riggs-Lethal Weapon 2



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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

As I have stated in a previous entry

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

Early spring

Unbelieveable, but according to the Azalas and Dogwood trees spring is either here or really close. I have never seen trees and plants budding this early. It is usually in April before we start to see signs of spring. Global warming? I don't know but we are enjoying the 70 dgree weather.

www.newbern-nc.info

Spit and Bailing wire

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



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

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

According to the New York Times.

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

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

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

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

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

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

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

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

As Gretchen Morgensen puts it

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

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

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

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

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

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

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

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

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


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


Federal Reserve Acts to Rescue U.S. Financial Markets

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

JPMorgan Chase Buying Bear Stearns for $2 a Share

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

What a bargain!

BREAKING NEWS: CRANE COLLPASE 51 STREET AND 2ND AVE

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

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

DO NOT EVEN GO TO THAT AREA! THERE IS A HUGE CHUNK OF STREET THAT IS NOW DESIGNATED AS A NO MAN'S LAND.

TRAFFIC FROM 2ND AVE BETWEEN 57 AND 53RD STREET WILL GO CROSS TOWN ONLY.

2ND AVE IS CLOSED BETWEEN 53RD AND 49TH ST.

3RD AVE IS CLOSED BETWEEN 50 AND 52ND STREET.

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

Admit it. You wish those were your marhsmallows.

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



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

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

It is something that Clayton Bigsby would come up with.

This just in...(tasteless joke warning)
New York governor Eliot Spitzer has tendered his resignation due to his involvement in a prostitution ring. David Paterson, the lieutenant governor, will assume office.

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

PAD

Philadelphia here we come

I have said before that Craven County has an outstanding airport, perhaps the best in the state for a county of our size. Today it got a little better. U.S. Airways announced that they are adding a daily flight from New Bern to Philadelphia International beginning June 3rd. The flights will be handled by US Air Express using 50 passenger jets.
This opens up access to 20 flights to Europe which is particularly helpfully for Bosch executives located in New Bern. The flight will depart New Bern in the morning and return in the evening. In addition to the daily flight to Philadelphia US Air has 7 daily non stop flights to Charlotte's Douglas International. In addition, Delta has 3 daily non stop flights to Hatfield International in Atlanta.
Kudos to Craven Regional Airport director tom Braaton and the Craven Regional Airport board of Directors for a job well done.