In working up the two posts on Stuyvesant Town in New York City, I came across this rent control debate in the comments section of an article in New York magazine. The two main posters are a long-time resident of the Manhattan housing complex, which includes many rent stabilized apartments, and an opponent of rent control. Somewhat nasty, the exchange is indicative of the emotional responses that the rent control issue provokes.

Anti-rent control guy

I’m tired of hearing the residents of Stuy Town complaining that their low rents need to be preserved because Stuy Town is a middle class oasis filled with hard working firemen and teachers.

This is nonsense.

There are people who have been living their for decades paying obscenely low rents. Good for them, but everyone else is subsidizing them with obscenely high market rents.

There is no law that everyone has to live in Manhattan. If they can’t afford a market rate rent, let them move across the river to Queens.

StuyTown resident replies

I’m sick of the wealthy real estate developers catering to the wealthiest citizens. I’m even more sickened by the complete lack of a community oriented, humanistic approach to urban development. Furthermore sickened am I by the lack of even half-way decent public schools to send your children to. Do you work for Bloomberg?

Anti-rent control guy

Hey StuyTown Resident-

If you can’t afford to live in Manhattan, or are too cheap to pay to live here, get out. Everyone else in the city is subsidizing deadbeats like you.

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Yesterday, we posted about what’s happening in New York City’s Stuyvesant Town: The companies that bought the apartment complex for $5.4 billion three years ago have defaulted on loan payments and walked away from the property, turning it over to creditors. That’s the equivalent of a homeowner stopping mortgage payments and mailing his house keys to the bank (see today’s New York Times article for a report on that phenomenon), except that in this walkaway, 25,000 tenants have been left in limbo.

An interesting post last week on the Manhattan real estate blog UrbanDigs.com explains just how wrong-headed the economics of the deal were in the first place, and why, as one observer said to the Times, the transaction is the “poster child for the entire housing bubble.”

Stuy Town – Not The AOL/Time Warner of Real Estate – Worse!

“At the time, it looked like a sound investment.”
    -Clark McKinley, a spokesman for Calpers.

Some of us are still wondering whether mass hallucinations were at work during the bubble years, allowing so many to act so thoughtlessly on such a grand scale…

I keep being plagued by the idea, that after a period of reckless profligacy, lessons must be learned, prudence must be rediscovered and tough choices made and vigorously executed to heal the prior transgressions. Yet our society seems unable to actually tolerate even the most preliminary steps in this process, including fessing up to prior bonehead maneuvers.

Example number one being the statement made above by Calpers regarding its investment in the Stuyvesant Town/Peter Cooper Village buyout by Tishman Speyer. I hate to disagree with the world renowned stewards of capital at Calpers, but in my humble opinion this deal was patently absurd from the day it was first proposed. If I had a fedora I would pledge to eat it if Tishman Speyer was actually unaware of how ludicrous the deal was when they first proposed it. But alas despite the sponsor having precious little skin in the game, a fantastical deal price and an incredibly pompous assumption that the seller had no clue as to the upside still embedded in the property, a bunch of Stuy Town losers stepped up to fund this deal which will go down in history as one of the biggest and stupidest real estate deals of all time.

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Two maps from the Mint.com blog.

First, moving from one of the most expensive cities to one of the highest-rated small towns. If you move from San Francisco to Farmington, Utah, for example, see what you’d be gaining in terms of cost of living. Click on the house icons to see specifics.

Next, who’s moved where during the recession. Click on the map to see it full size.

Three years ago, two companies, Tishman Speyer Properties and Black Rock Realty, bought Stuyvesant Town and Peter Cooper Village in Manhattan, an iconic post-war housing complex that is home to 25,000 tenants, many of them with rent-controlled apartments. Last month, in what one observer called “the poster child for the entire housing bubble,” the deal blew up when the partnership defaulted on its loans and turned over the property to creditors. From the New York Times:

Now, according to the Times, tenants are “in limbo,” and a rally was held Sunday to keep the housing complex “an affordable oasis,” in the words of the New York Daily News. Below is a video from the rally featuring dozens of long-time residents, found on the blog StuyTown’s Lux Living. “This is my home,” one tenant says, “and it should be treated better than a Monopoly game; we’re talking about people’s lives, not profits.”

For more on Stuyvesant Town, check out The Stuyvesant Town Report.

Neil Barofsky, SIGTARP

But this post from The Conglomerate, a blog written by a group of law professors, argues that the Inspector General, Neil Barofsky, may have acted outside his purview with such broad judgments.

Last week, Neil Barofsky, the Special Inspector General of the TARP, released his latest report on the implementation of the TARP program. Most news agencies responded to sound-bite sentences in the report that TARP “had not worked” and that there still was too much risk in the system and that we may be creating a second housing bubble. The report also contained criticisms of the New York Fed’s handling of AIG (they should have been stronger negotiators, among other things), and of executive compensation in general.

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Boy, people can get really sarcastic on Craigslist…

I’m reaching out to all members of the Bay Area BMW motorcycle riding community for your support of a fellow BMW rider who’s fallen on hard times. Anyone who’s perused the CL motorcycle listings at least once during the past year has seen the posting for the BMW R100 Head Pipe (damaged). I, like you, initially thought this posting was made as a joke for our entertainment but the subsequent weekly posts have convinced me that not only is the seller serious, persistent, and probably destitute but the clear signs of impaired judgement indicate he may be delusional as well. This individual, in his own way, is crying out for our help.

Nobody in Northern California actually needs or wants a damaged headpipe and current economic conditions have dictated a good belt tightening for all of us. May I therefore suggest a “Damaged Headpipe Charity Ride” as a means of both generating the $35.00 the seller so desperately needs and of showing him that BMW riders can be counted on to be there in his time of mental and emotional need. We can do this with minimal impact on our own wallets. There must be at least 350 motorcycle riders in the Bay Area willing to bite the bullet and cough up a dime apiece to help the poor dude. (May I suggest you get “pledges,” from your workmates, family, employer, etc. to help in this donation effort if you too are facing financial challenges but still want to help). We can set up a group ride to the sellers’ home in the Pleasanton/Livermore area on a mutually satisfactory time. Or, we could wait until next Summer (I’m sure the ad will still be running then) and do it when the BMWMOA has its’ big rally in Oregon. Once the circumstances are explained to the Rally attendees I’m convinced we could get 3500 riders to not only cough up a penny apiece in support of this challenged individual but ride down en-masse for a $35.00 presentation ceremony on the fallen Brothers’ doorstep.

Let me know if you’re in.. Thank you and God bless you for your help.

I’d pay a dollar just to read the guy’s response.

UPDATE: Wait, strike that! I’m not paying a dollar, but I found a response on a BMW Motorcycle Owners of America forum.

STOP! Before you flag this ad (again), know that when you do I’ll just re-post it. And the way Craig’s List works will cause it to rise to the top of the listings. Leave it alone and it’ll slide back down to the bottom, and if someone hasn’t bought the pipe before the ad expires a week or so down the road I’ll renew it. Just like the CL guidelines say I should.

I don’t know why certain people on this list have taken such exception to this post. Yes, it’s for a part that has seen better days. But the pipe is not junk; it got me to Baja and back a few years ago, no problem. Somebody out there with more skill than money, and the right tools, can make it good as new, and at a cost that’s pennies on the dollar. I’d like to give them that opportunity. That’s what CL is all about.

As far as I can tell I’m not violating any of the CL guidelines. And I won’t let this ad be taken advantage of by a bunch of small minded people acting like grade school playground bullies. Keep flagging and I’ll keep reposting. That’s not overposting; that’s standing up for what’s right.

Got it? Now back to your regularly scheduled programming.

This stainless steel head pipe is gen-u-ine BMW and fits the R100GS and/or the R100R. This particular example has seen better days, but is still functional. As you can see in the images, the leg is a bit pinched. It could probably be expanded back out by a muffler shop for a few dollars, but I haven’t tried. With a tubing expander like this one you could fix the thing yourself. BMW gets about $175 for a new head pipe, but if you can make this one work it’s yours for $35. Shoot me an email reply if you’re interested and we can get together. I’m not interested in shipping; it’s too big and you should see for yourself what you’re getting before the purchase.

So there…

Time for another go-round — our third — with The Brian Lehrer Show’s Uncommon Economic Indicators web page, where people submit signs of the recession observed around the New York City area. These won’t show up in any government statistics or charts, but they turn the abstract gloom of macroeconomic numbers into a concrete picture of what’s happening in the community.

The (un)real estate situation

Maplewood and South Orange, in Essex County are highly desirable communities for people moving from New York City. I’ve been showing homes in Maplewood and South Orange…every single one of them is involved in a tax appeal. It is impossible to counsel my buyers regarding price. And all but a very few are either short sales or bank owned or impossible to show. It’s just completely crazy now. I have never seen anything like this.

Can’t give it away

I am a professional photographer. I regularly photograph a trade show over five days for a major trade magazine. The editors decided to forgo the coverage last year because they did not have the budget. I usually enjoy this work and I have shot this show with them for years. I decided to volunteer to shoot it for free one day to help out during hard times. However, the editor said they could not use my free pictures — there were not enough pages in the magazine to run the photos. There is not enough advertising to support it. I can’t give my services away in this economy!

Pass it on

Lately, (my grandmother’s') taken to picking up the newspaper after her sister-in-law down the street is done with it. My grandmother will read it, and then she’ll pass it along to a friend of hers.

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Neil Barofsky, the Special Inspector General for the Troubled Asset Relief Program (that’s SIGTARP to you) has released his Quarterly Report to Congress, which you can read here in .pdf. The opening section of the Executive Summary is below, and frankly, it’s not the most comforting thing you’ve ever read. While some of the conclusions describe positive results, others qualify as downright scary, and I wouldn’t be surprised to see direct quotes highlighted at upcoming Tea Party rallies.

My own executive summary:

• The financial system is far more stable in parts than at the height of the crisis in fall, 2008. Banks can raise funds and many that were on the verge of collapse have made an early repayment of the emergency government loans. These have resulted in a profit for the U.S. Treasury on some TARP investments, decreasing the cost of the bailout to taxpayers.
• The TARP goal of increasing financing to U.S. businesses and consumers has not been met, as lending continues to decrease and home foreclosures remain at record levels. The repayment of government funds by banks and the exit of the U.S. as a major shareholderhave significantly decreased the government’s ability to influence the policies of these financial institutions.
• Fundamental problems in the financial system have not been addressed to date, and “too big to fail” institutions are even larger, thanks in part to TARP and other bailout programs. Incentives to take reckless risk are even greater, as the market is convinced government will step in to cover losses that could threaten the system. Executive compensation also remains an incentive to take big risks.
• The government’s efforts to support home prices risk re-inflating a housing bubble.

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I was hanging out with a group of actors in their 20s recently, and they were all very stressed about their employment — or lack of it — situations. One guy was on the verge of desperation; he had applied for 50 or so low-paying jobs without a single nibble, and he was hanging his hopes on getting hired to walk around asking people to sign petitions. A woman had thought she could get a job at Starbucks but was told they weren’t hiring. And another woman could only find a position at a telemarketing firm at which she was instructed to start each phone conversation with the lie “We’re not selling anything.”

Hard times, indeed, for the recently graduated or those without a lot of work experience. Which was the genesis of the blog Living Craigslist. The introductory post:

When you graduate college, the last thing you want to do is find a job pushing paperclips. You have just spent hundreds of thousands of dollars on an education, seemingly worthless now considering even McDonalds has stopped hiring mop boys.

Click for video

With the economy’s implosion widespread enough to cut one New England zoo’s budget (enough to force) keepers to put down 20 percent of its animals, suddenly filling in as the resident paperclip expert seems more appealing.

Unfortunately for me, I never knew a great deal about affixing one piece of paper to another with a curvaceous steel rod. It wasn’t my major in college and I didn’t feel I had it in me to figure it out. Besides I’m more of a staple guy myself. I turned to Craigslist. And why not? I had furnished my dorm room with other people’s futons and found enough odd jobs to help finance my now useless college degree.

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A post on the Angry Bear economic blog argues that the vote for Republican Scott Brown in Massachussetts, which deprived Senate Democrats of a crucial vote needed to pass their health care bill, was not in fact a referendum on the legislation or the health care issue.

Summary points:

• The vote had more to do with the individual candidates than the issues
• The economy and jobs were the primary issues driving voters
• Coakley lost because Latinos and African Americans did not come out to vote
• Those who knew Brown’s position [on reform] were as likely to say it made them less likely to support him as to say it made them more likely to support him
• Voters were not expressing dislike of Obama
• Very few Brown voters expressed dissatisfaction with the legislative process on health care
• Large percentages of people did not know various specifics about the bill, and the more they knew, the more likely they were to support it

Who Voted for Brown in Massachusetts — and Why?

The media continues to report that the Massachusetts vote was a referendum on health care reform — and that this has the White House worried. If so, the White House is wrong. Take a look at (various polls) and you’ll have a very hard time believing that Scott Brown’s election represents a mandate on healthcare legislation.

Who Voted for Brown ?

Democrats who are disillusioned that Obama has not pushed further on health care reform? Upper-middle-class voters who believe that Obama doing too much, going too far, and may well hike their taxes? No, the surprise is that Brown was elected by Massachusetts’ working class, and they were not focused on health care legislation.

Non-college men voted for Brown by a 27-point margin (59% to 32%), and non-college women also voted for Brown by 13 points (while college women went for Coakley by 13 points)…

What happened? How did Democrats lose so many working class voters? Many of the non-college voters who chose Obama a year ago were Latinos and African Americans. This time, they stayed home, according to election eve and election night polling…

Keep in mind that a minority of white voters pulled the lever for Obama in 2008—he needed non-white voters to carry him over the top. Apparently this time Democratic organizers in Massachusetts didn’t work very hard to bring out their vote, or to explain to minority communities that, even if they didn’t particularly warm up either candidate, this vote could be important for health care reform…

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