Monday, September 22, 2008

The Politics of Depression

Politics: "The conduct of public affairs for private advantage."
--Ambrose Bierce (1842 - 1914)

Our Dear Leader, Hi-Rise Mike, is still playing with us over whether he plans to step down. Rudy did the same thing, using 9-11 and our perceived ability not to be able to do without him. He is severely misinformed, or perhaps just egotistical.
While numerous media plugs discuss his supposed popularity among the voters, many Downtown have put up with one development proposal after another – including his buddy’s Condo-Hotel (Trump SoHo) – a project that has destroyed a neighborhood as well as its re-zoning. Trump is still trying to add floors, even while the project is stalled.
Fortunately, although Quinn still has Bloomberg’s job in her sights, she has managed to pass legislation that, in spirit at least, does something that harassed tenants can hang their hats on. Provided, of course, that they can afford expensive legal counsel. Slushgate has started to fade in people’s minds.

We all recently learned that Hi-Rise Mike has been meeting with others who control what we think – Murdoch of News Corp and Zuckerman of the Daily News – to float the coordination of support for this third term as Mayor. The fine print of their meetings makes note of the fact that the current candidates are not generating enthusiasm among those moguls. For those who know the field of dreams for next year’s election, that means the front-runner Bill Thompson – with a second and third tier that includes Weiner and Quinn.

The Boys from Harvard have been groping for a way to prove that Mike is our man and should remain so with as arrogant a Press crew as one can imagine. So far, that has been falling on deaf ears.
The fact that our new Mayor told us from the beginning that where he goes and what he does is none of our business – was the tell as far as arrogance was concerned -- when he was first elected. His estate in Burmuda was the probable location of a weekend away from the helm. But, hey, I’m away for the weekend, it’s none of your business where I go. Koch or Guiliani would never have done that, come to think of it, neither would Bush.
A man of the people doesn’t hide out when he doesn’t want to be bothered. This is a public job, not just public when you feel like it.

Bill Thompson, the front-runner in the Mayoral election is a smart, able politician and was duly pissed-off when Mayor Mike started this “I know better what you need than you do” routine, recently.
What Thompson did not say, and what is increasingly a possibility, is that it may be just another form of political racism -- sugar-coated so as to be tolerated by the masses of liberals being duped by the money and the media control -- which obviously includes the Bloomberg media. For him and his media buddies to assume that Thompson is not every bit as competent as he is to run this city, is suspect to say the least.

So, as we sit back and watch the Depression overtake us, ponder some of these unspoken tidbits:

Coop and condo sales ARE tanking and prices are being dropped by people who are having a hard time paying maintenance fees. It is done more stealthily, but any broker who tells the truth will verify it. Six months ago, even HPD would tell you that coop and condo boards were starting to be investigated for not maintaining buildings – individual shareholders having had to call HPD to get the board to make routine repairs in common areas.

And, now that Wall Street is imploding, expect to see a wave of defaults and foreclosures—not to mention nearly 100,000 layoffs. Lehman Brothers employees managed to be picked up by Barclay’s (for the moment) but what no one is talking about is the massive loss of assets as stocks tank or become worthless, as in the case of Lehman. At the big firms, the cash for multi-million dollar properties (condos, coops, townhouses, developments) was not always arranged with mortgages. Many were financed with loans collateralized with stock pledges. Now that some of that stock is worthless, the loans can be called on that stock. Now, there’s a prescription for joy.

And, a word about our new savior, who has unlimited powers NOT subject review by the Courts. It’s very interesting to note that Lehman was allowed to fail and Goldman Sachs survived.
Lehman did not contribute to the Long Term Capital debacle – and many consider this payback. Barclay’s was interested in part of the Lehman operation and had been offering numbers approaching $5 Billion – and rumor has it that they were told to wait. They did – and bought if for $1.3 Billion only days later.
Paulson was the CEO of Goldman Sachs.

Think there is any correlation here?

Wait til you see what kind of sweet deals are cooked up with the RTC-styled maneuver now in the works.

"Somehow Lehman Brothers gets left on the sidelines," said Daniel Golden of Akin Gump Strauss Hauer & Feld LLP, who represents clients holding about $9 billion in bonds. "We believe this was a flawed sales process. It benefits Barclays and the federal government but not the creditors of this estate.

"The economic landscape seems to have changed over the last two days," he said. "Yet the debtors and the Fed seem determined that nothing get in the way of this transaction."

Had Lehman filed for Chapter 11 a week later than it had, its fate may have been different.

"This is a tragedy - maybe we missed the RTC by a week."

If they think Lehman was a tragedy, wait until the new RTC deal, christened Baillie Mae, gets moving.