Tuesday, July 28, 2009

The Double Cross

I once said cynically of a politician, 'He'll doublecross that bridge when he comes to it.'
-- Oscar Levant (1906 - 1972)

The recent news pieces about election time in the Hamptons have evidenced a panoply of sub rosa deals and three-dimensional chess moves. Most of the reports focus upon a Republican deal in which Jim Malone was to have dropped back to run for Town Board instead of challenging Linda Kabot for Supervisor of the Town of Southampton. Current Supervisor Linda Kabot was to have a clear run in November, having apparently made peace with the Republican Party to avoid another Primary contest (she won the last one two years ago against incumbent Skip Heaney). But, apparently, the antagonism among Republicans who supported Heaney has deep strong roots and the deal to have Malone run for a Town Board seat and to step aside for Kabot to take the race to November against Anna Throne-Holst, has blown up.
With the Conservative Party endorsing no one in November for Supervisor, the several lines on the ballot gives an edge to Throne-Holst. Postings on 631politics (http://twinforks.com/ "Conservative Party Tricks") have some blog entries that describe the gory details.

Malone is still running for Town Board but the tacit agreement that the Republicans would support Kabot for re-election has been side-tracked with the removal of support by the Conservative party endorsement.

The tea leaves point to a bait and switch whereby the Republicans would rather hand the election to Throne-Holst for Supervisor this round and place their bets on the contest for Supervisor next time around between Throne-Holst and Malone – than allow Kabot to have another term. Of course, one should not underestimate Kabot’s political acumen or popularity with residents. An internal struggle that would remove Heaney’s grip on the party may now be playing out between Kabot and Heaney forces.

No matter what you think about Skip Heaney, though, he continues to land on his feet and exert his influence over Southampton Town politics.

Saturday, July 18, 2009

The End is Near?

It's a recession when your neighbor loses his job; it's a depression when you lose yours.
-- Harry S Truman (1884 - 1972)

After several years of doom and gloom blogs and articles that point to the potential for devastation in the local economy as well as the national financial health, we are knee-deep in muck and mire. And, it’s not the vaudeville act by that name appearing in the Catskills. Few remember the fact that in 1982, prices for homes in the Hamptons actually dropped. This time around it is much worse.
Real Estate brokers were embarrassed and sellers were stunned in 1982. Now, they are heading for the exits.
It is now more akin to a creeping Depression
– which some think we have already entered. When you factor in falling tax revenues, missing money, increased budget needs, evaporating credit markets and rising unemployment, the picture is getting worse by the week. Given the fact that employment figures are rarely accurate and do not reflect numbers of workers whose benefits have run out and drop-outs who have lost hope, the real unemployment numbers are likely to be closer to 15% than the much-advertised 9.5%.

Many optimists thoughtfully point to the recent stock market rally which in many previous recessions was thought to be a prognosticator of future rebounds. They thought that in 1932 too, after the 1929 drop was “over” and just before the market lost 90% of its value -- in 1933.
And, with the price of oil seemingly stabilized – it, too, is also in a dangerous decline. Comments by some economical professionals have warned of a precipitous drop. It is said that $60 dollar oil is manageable, but that $20 oil
will foment revolution in countries like Russia.

The Hamptons have had their fair share of scandals this summer – from accusations of mortgage fraud to politicians dipping into the Preservation fund – but, nothing compares to what a month of summer rain can do. Pool companies, contractors, real estate agents, landlords, car dealers and purveyors have felt the pain of a double-whammy.
All have suffered from the disappearance of Bear, Sterns and Lehman Brothers bonuses and have experienced what has been an increasing problem – no customers and no cash.
We are about to enter a winter on the East End with no reserves, no cash, no credit and no prospects for nearly a year when the Spring "buying season" arrives. Main Street already has empty stores and the bankruptcies as well as business collapses are just around the corner. Foreclosures on many prime loans are just beginning, as distinguished from subprime products that banks foisted upon borrowers – and commercial real estate is just now heading down.
Independent lenders are predicting that this whole process will take another 3 to 5 years at a minimum. Some say that value in the Hamptons will not return to “normal” until 2020. By next year, the value of property is likely to have dropped by 50% across the board.

This will be the Winter of nearly everyone’s discontent no matter what the upbeat Obama officials tell us.