Summer in the Hamptons

Illusion is the first of all pleasures.
Oscar Wilde.


This turned out to be the summer that never happened in the Hamptons. Between the rain, cool temperatures and lowered expectations, many local businesses that do not serve alcohol suffered. Even restaurants suffered. Beaches were often empty. At times, it was actually quite pleasant not to be buzzed by Porches and Bentley’s trying to find a parking spot at Roger’s Pavilion in Westhampton Beach.
The Real Estate industry continued to contract and several brokers closed-up shop. Estimates of total price drops hover between 35% and 50% from their 2006/2007 highs and the main selling areas are now in the under $500,000 range. While there are sales in the million-dollar territory, price reductions and hard bargaining are now the norm since mortgage money in that category is difficult to obtain. While there are actually some new no-income verification loans available, generally a 30% deposit is required.
There are many differing opinions on when the market will return to some semblance or normality, but right now properties languish on the market for up to two years if they are not priced aggressively – translated: take a beating or sit with an unsold home.
East Hampton has done better in terms of rentals and sales and Southampton has had the biggest drop in activity. This summer, renters started out by offering owners 50% off the listed price. Buyers have brutalized brokers as well as sellers – often walking away after they got their price. Despite this, one $25 million dollar mansion rented for half a million dollars for the month of August only.
Nevertheless, the shake-out will net fewer real estate brokers, fewer rental units and fewer businesses to service them by next summer. Let’s just say that it was not a summer to be in the lawn sprinkler business.

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.

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.

Imagine

If I'd written all the truth I knew for the past ten years, about 600 people - including me - would be rotting in prison cells from Rio to Seattle today. Absolute truth is a very rare and dangerous commodity in the context of professional journalism.
-- Hunter S. Thompson


The people shall not be deprived or abridged of their right to speak, to write, or to publish their sentiments; and the freedom of the press, as one of the great bulwarks of liberty, shall be inviolable.
-- James Madison




Imagine that you are a journalist in a country where the ruling party and its government does not tolerate criticism or a difference of opinion. Or, were you to voice opposition to the government, you would be killed or destroyed – using any means possible. That the focus of the government attacks may be couched in some other mainstream, popular vehicle, permitting vast media resources (including PR and phony leaks) to create an adverse frenzy is merely part of a strategy. Think about reporters waiting for you at every turn, walking around your apartment and offices, asking accusatory questions based upon innuendos and lies to sell tabloids and gain viewers. Almost any excuse can be used by a government to make you, yes you, a criminal to be pursued.
What is widely viewed as legitimate business practices, can, with a twist of focus by a government official, become an illegality.

In Russia, several journalists and human rights advocates have been the focus of convenient, high profile murders that were never solved. Court cases pointed accusatory fingers but juries have acquitted them – as arranged. In Iran, North Korea and other countries, similar actions have caused journalists following important issues to be tried and imprisoned simply for investigating and writing.

For a journalist in America, with financial devastation facing many publications, prospects for the continuation of Free Speech and Freedom of the Press is in severe jeopardy. Even the New York Times is in serious trouble and may be sold within a year. Only bloggers, themselves journalists, have a real handle on many issues and continue to carry the torch for truth, even if biased at times.
A journalist or blogger now must often choose between writing the truth, conveying a sense of the real subtext in his or her political environment or community, and being able to live one’s life unmolested. There is a heavy price to pay for speaking out.

Who will uncover truth in our society if these trends continue and more and more media slip into the mist of history? How will we continue as a Democracy if the forces of the State are allowed to destroy people using whatever means at their disposal?

Imagine that you had a point of view that you were afraid to voice in America. Will we now crucify and destroy those who disagree with us? Is this the new journalistic reality? Is this our future?

If we lose our liberties, there is no end to the slide into totalitarianism and terror.

The Hamptons Meltdown

I get no respect. The way my luck is running, if I was a politician I would be honest.
-- Rodney Dangerfield

As the politicians and media play out their roles in the recent real estate hysteria in the Hamptons, all eyes are looking away from the mismanagement and incompetence in the face of this financial Armageddon.

General Motors is facing the possibility of bankruptcy, Citigroup is certainly not making Saudi Prince Al-Waleed happy and AIG stumbles along on Federal loans.

Those who have been reading the tealeaves, including financial consultants and media gurus, watch Wall Street galloping away from the true cause of our potential financial demise – the derivatives market. Yes, that’s the $700 Trillion dollar elephant in the room. AIG is only a small element of that giant scheme which wrote insurance on sums that could never have been covered in case of a default.

Of course, that’s more difficult to comprehend and impossible to prosecute. It is an amorphous ride into Hell that makes Dante’s Ninth Circle seem like a trip to the Caribbean. Warren Buffet warned us all many years ago, as he started to unwind counterparty positions, that there was a ticking time bomb in our financial system. Even he has lost billions as a result.

As we consider the non-existent sales market -- auctions, short sales, and foreclosures have grabbed the headlines. But, until there is liquidity and a return to lending, all bets are off. Look for a shrinking of the commercial real estate market, downsizing of almost all businesses and the quiet disappearance of many real estate brokers. Jobs will also be difficult to find, except in the seasonal summer months.

This time around, unlike the crisis which began with the 500 point drop in the Dow in 1987, it is possible that the Great Recession may last anywhere from two to five years longer. Some predict that we will not be out of this until 2020.

Puffery in the Press

Advice to writers: Sometimes you just have to stop writing. Even before you begin.
-- Stanislaw J. Lec (1909 - 1966), "Unkempt Thoughts"


Well folks, the boys and girls at the Southampton Press are at it again. We’re not really in a Recession or even a mild Depression, because the “bridge and tunnel crowd” are all around us buying out the stores in the Hamptons. In fact, there’s barely any room to park those Mercedes’. Lizzy Grubman says so. Even though her comments are made from home in Manhattan.

After trashing Grubman mercilessly in their rag a few years ago, they now want to quote her to revive the local economy. The comments following the article all focus on Grubman and, of course, the negative remarks were all published. Press editors usually filter out negative comments about them or the publication if they appear online.

And, in a sideswipe at the New York press, (not to mention this blog) which has been reporting the fact that real estate sales are non-existent and that rentals are a disaster, this article practically oozes confidence in the Hamptons chic. In other words, maybe someone at Town Hall thinks that, “Gee, maybe we do need the New York people to pay the bills here, after all!” But, no one can seem to admit that and simply say it.

Of course, the fact that the author, “investigative journalist” Michael Wright, quotes PR people and advertisers found in the Southampton Press, begs the question: from what planet does the writer hail? Or, better yet, did the assignment to find optimism come from Joseph or Donald Loucheim, the current publisher. Is advertising down, perhaps?

Now, before anyone gets too testy, let’s understand our terminology. The “bridge and tunnel crowd” a term used by the Southampton Press writer, was coined to describe visitors from New Jersey and the Boroughs (as in Queens, Bronx, Staten Island and Brooklyn), who regularly visited Manhattan on weekends, to party. Referring to those from Manhattan obliquely as part of the “bridge and tunnel crowd” is not only incorrect – it is indicative of the negative attitude towards all New Yorkers. As, in, “we love to hate them but they bring cash.” In fact, the only cash that is likely to prop up the Hamptons. And, in truth, on an income basis, it is more likely that a Manhattan resident would be the owner of a weekend retreat in the Hamptons. Jerseyites generally visit and buy on the Jersey shore – where it is more fun, cheaper, and has less Code Enforcement police to hassle them in a summer rental. While the summer rental crowds from the Boroughs as well as Manhattan still do come to the Hamptons, they have been disillusioned by the anti-New Yorker attitude that has chased away summer house shares, which used to proliferate in the Hamptons and supported so many local businesses. Skip Heaney, as Supervisor, saw to it that they were treated as targets by Town government.




Now, the Town wants that money to come back because McMansions are no longer selling. With no mortgage money available, dwindling Community Preservation Fund money to dip into, evaporating property taxes, missing Town funds, and a budget deficit -- rentals may now be the only form of hard currency for the Hamptons. Think about that folks.

While the reporter acknowledges that Sag Harbor has seen no such uptick in business (except for the American Hotel), that fact is merely a tag line in this puff piece trying to pass as news. And, although Westhampton Beach Village was recently visited by another, stellar reporter named Jessica DiNapoli, no mention was ever made of the fact that in that village numerous businesses have closed up, several establishments have ceased to exist and large stores are vacant or closed with no date for re-opening (National, Westhampton Bowling Lanes, Westhampton Movie Theatre, the Health Food store and a few others). In addition, several stores have shrunk or downsized. Apparently, no one who attempts to write at this newspaper talks to each other about such “facts” to check.



There is no line for a space to park your Mercedes in Westhampton Beach. Nor is there ever a sighting of the Mayor or Village Board. Perhaps, those elected officials should visit Water Mill or East Hampton and pick up a few tips on bringing in business. Or, the reporter might give them a lecture on how to arrange for those crowds milling about in Water Mill, like zombies from “Night of the Living Dead,” to move their operation in front of some shops on Main Street?
It is likely that the business experienced in the last week was due to the numerous, rolling, spaced out St. Patrick's Day revelers that has brought some restaurant activity in many villages, but little else. The same holiday is celebrated for weeks in different East End Towns and Villages.

And, should it be pointed out that parking spaces and window-shopping do NOT bring in cash. Just as calls to brokers do not translate into sales or rentals.
In other words, folks, this bizarre puff piece has all of the earmarks of a plant for PR purposes, supported by PR operatives, designed to encourage more business from people who the writer wittingly, unwittingly or dim wittingly is insulting (“bridge and tunnel crowd” a.k.a New Yorkers) and who the Town continues to target if they rent a summer house and try to pay for it the old-fashioned way – sharing it with friends. In fact, last weekend saw another wave of Code Enforcement “visits” to no less than 40 properties owned by various New York landlords to check for rental permits. This is a prelude to more heavy-handed actions against Latinos and young New York renters—which is the reason why the new law was passed. It should be scrapped completely.

This article was, as they say, an attempt to put lipstick on a pig. The pig, in this instance, is the disastrous economy in which we are all suffering. To think that people, who are losing their jobs and cannot afford their apartments, will drop everything and flee to the Hamptons to line up in Starbucks – because of this puff piece -- is approaching madness. And it is an insult to those who are suffering in this deflationary recession. While Wall Street may be responsible for the derivatives-driven economic meltdown, New Yorkers are not stupid.

However, the article is.

The Sun Also Sets

People everywhere confuse what they read in newspapers with news.
-- A. J. Liebling (1904 - 1963)

The journalism industry, a long plastic hallway where thieves and pimps run free and good men die like dogs, for no good reason.
-- Hunter S. Thompson (1939 – 2005)


As the apparent economic implosion arrives with full force more and more businesses are reading the tealeaves and what the facts portend.

It is already March and in the Hamptons real estate-driven economy – where the only form of financial engine pays for everything from summer rentals, to hamburgers, to newspapers – desperation has begun to set in.
This is playing itself out in a few ways. The election process, which has always been a Republican fait accompli at the polling stations, is now seeing inroads from a previously dysfunctional Democratic Party. That is no longer true and there have recently been real challenges and successes – including Sally Pope on the Town Board and possibly Anna Throne-Holst as Supervisor in November.

Many New Yorkers have moved from Manhattan, relocated to the East End, and become more involved in Hamptons politics along with the artists of previous decades. With them has come a more progressive view of how business should be done at Town Hall.
What cannot change overnight, is a response to the Wall Street debacle initiated by the creation of a derivatives market which has poisoned the well for everything from corporate debt and mortgages, to bonds and credit-default swaps for esoteric debt instruments. As this plays out on the economic stage, the Hamptons will suffer more than the canyons of SoHo, Tribeca and Wall Street where condos and coops will first experience defaulted common charges (to be assumed by the others in the building), and then move on to actual foreclosures.
Right now, the outer boroughs are contracting at an alarming rate and the default and foreclosure rates are soaring. The SoHo Journal has been writing about this for several years as Wall Street plumbs the depths of the Dow.

In the Hamptons, the big lie is that it is just going to be a “later season.” In fact, many real estate brokers are saying that the lack of phone calls is scary.

Where will this lead? Well, everyone will be cutting prices on everything. There will be a summer but you know that things are difficult when lawyers start calling for business. Many lawyers and brokers no longer do any closings because there are simply no mortgages, no customers (above the $350,000 range) and more than two year’s worth of product sitting in the pipeline. This will lead to layoffs at Town Hall, in the police departments, at local stores and at many real estate agencies. When the money runs out and the flood of tourists dwindles because they have lost their jobs, the economy WiLL contract. That is already happening.

How is this reality being handled?
Well, among the die-hard Republicans and old boy network, they try to protect their friends.
Instead of reaching out to New Yorkers, where the money has always kept this Ship of State afloat, those who criticize the local economy and lack of foresight – as well as the corruption among the politicians who have brought us to this place in time -- it has always been popular to attack the opposition.

The only source of Hamptons news has traditionally been the Southampton Press, a Louchheim publication that has always taken its direction from the Republican Party, Town Hall and Law Enforcement (whom they fear) operating on instructions and fealty to its advertising base – the Republican Party regulars. They employ inexperienced “reporters” who take direction on the slant that the publication should produce for so-called public servants, like Town Attorney/Assistant District Attorney Joe Lombardo (who has been sued in Federal Court for his irresponsible and unconstitutional behavior) and conducts smear campaigns on assignment from Loucheim.
Since there is no real news organization in the Hamptons, efforts by the likes of Jessica DeNapoli, a “reporter” whose journalistic expertise rises to the level of “What I did on my summer vacation” and who apparently follows instructions to target political opponents of the Loucheim dynasty and its political handlers. Joe Lombardo, who works for the Town and its Heaney holdovers as well as his boss Spota call the shots and provide the leads. No matter that they are criminals hiding behind a political appointment.

The search for reasons why the derivative market is THE reason for killing the world economy (all $700 Trillion of the bets that are burying us); the Wall Street boiler rooms which created the foreclosure meltdown by securitizing and selling off worthless debt; the fact that mortgage brokers were psychologically beaten and threatened to create more and more product – is nowhere to be found in the local press. What this “news” organization focuses on is the DWI’s in local police blotters, dogs being brought into Town Hall, and noise violations in Westhampton Beach. Instead of bringing New Yorkers closer to the Hamptons, targeting and attacks are the new “journalism.” The institutional racism, which has spawned numerous Federal lawsuits, against Town Attorneys and politicians, has received little or no follow-up.
Where are the reports about the true costs for legal fees due to the unconstitutional actions that hide behind the Towns legal decisions? Where is the investigation of Code Enforcement personnel that target landlords who rent property to immigrants – under the direction of the Town. Why are there no apologies for targeting landlords in news pieces that are completely false and pander to Town officials?
Why? Because it is too dangerous to the ad budget and would displease the Republicans. It would also open up the Loucheims to unwanted scrutiny and lawsuits. Best not to go there.

Watch for more “leaks” and attacks against political opponents or New Yorkers via DiNapoli which the Press despises and tries to pass off as “investigative reporting” from a “news” organization that cannot even spell-check its articles properly. The Southampton Press is a throwback to the type of local targeting mechanism-for-hire that takes orders from its political handlers who have a lot to hide.

The Howell Raines imbroglio at the New York Times comes to mind – but, of course, even those fictitious journalistic entries by Jayson Blair were not ordered by the local political party in power.

Let’s see how this plays out.

Hamptons Politics

Morality, like art, means drawing a line someplace.
-- Oscar Wilde (1854 - 1900)
Election rumors in the Town of Southampton are heating up. Between the missing money that no one can seem to find and the implosion underway in the economy, it will take clean hands and moral strength to pull the Hamptons through this storm. The bucolic East End was a sleepy rural area at one time but that was decades ago before McMansions and heavy Republican politics. Many of the former politicians like Skip Heaney were from “up Island” and influences from neighboring towns saw the money, which flowed through the Preservation Fund coffers and moved in.

This years contests include the Supervisor’s post, Town Board slots, Town Clerk and Town Highway Superintendent. Nuzzi is running again for a slot on the board and, surprisingly, while a Crookhaven transplant and Heaney protégé he’s come out on the right side of a few issues. But, the real contests are Town Supervisor and Highway Superintendent.
First, Alex Gregor is rumored to be considering a run for William Masterson’s position as Highway Superintendent. This is not the first time they would be squaring off against each other. However, the previous race was marred by dirty tricks on the part of the Heaney Republicans and a lot of local voters remember the bad taste in their mouths over that campaign and how Masterson won. Gregor would likely win this contest and it would be a major vote for good government.
The Kabot/Throne-Holst race is a bit different. Kabot was a step up from Heaney and the Republicans who controlled Town Hall for decades. The animosity between Kabot and the Heaney controlled machine was palpable. Unfortunately, Kabot has squandered her victory and has appeared to play it safe at every turn and has not come out with strength on any important issue. Unfortunately, she has also recently dwelled upon a non-issue and leaked a negative press piece to the local organ of the Republican Party – The Southampton Press – about Throne-Holst bringing her dog to work, of all things. Try as it might, the Press’s anachronistic attempt at journalism always manages to fall on its face and show its reactionary roots. If ad sales continue as they have with other major news organizations, however, the days of the online and printed version of this publication may be numbered.
Clearly, while Anna Throne-Holst has had minor missteps in the service of improving the environment, she is an outspoken reformer. The Town now has an opportunity to make a fresh political start in a resort area that will now be severely challenged by world economic events and its local history of punitive values. The little understood financial realities that have trickled down from the derivative disaster – which has caused everything from subprime defaults to the evaporation of credit -- is something that the new Supervisor must cope with. The financial investigation that is going on in the Town, the prospects of a severely reduced budget, and the realities of the Preservation Fund drying up – will be challenging. And, all are Republican-made problems that are a result of greed and, to be charitable, mismanagement.
Throne-Holst has a steady hand and does not owe her success to any group. While the Democrats supported her in her Town Board election, they do not own her vision.

The Panic Phase

The only way not to think about money is to have a great deal of it.
-- Edith Wharton (1862 - 1937)



It is difficult for most of us to believe that we now may be looking over the precipice.

A series of Doom and Gloom pieces published here were somewhat unpleasant – but now there is the real prospect of a very serious drop brought on and also perpetuated by a deflationary spiral. If you’re out of work in the Hamptons and you’ve been trying to figure out what to do next, there is no surprise about what’s out there. What was unthinkable before now seems possible.

Rentals are off, jobs are difficult to find, and home sales are few and far between and the blame game is now beginning in earnest. When in doubt, indict someone.
The press is not immune and the bloodletting in that industry is just beginning. Newspapers are filing Ch. 11 at an alarming speed. Suffolk Life was one of the first local publications to go after the Improper Hamptonian bit the bullet. More will follow. It has little to do with newsworthiness. The problem is lack of advertising. Businesses that typically advertise, which are failing, hasten the demise of publications -- and then there is the readership move to the Internet. Hamptons.com and 27 East, for example, have had some success -- but that does not sell newspapers. Regardless of the merits of those publications, people have stopped buying newspapers, stopped subscribing, and will not pay for Internet access. It’s a deadly combination for publishing since reporters and office staff still needs to get paid. This week the venerable Rocky Mountain News ceased publishing,
The New York Times faces a possible Chapter 11 and most newspapers operate in the red.
To make matters worse, it has been open season on journalists. In Russia they shoot them, in Somalia they murder them, in Iran they arrest them, in Suffolk they terrorize and indict them.

The 401K that was supposed to allow boomers to retire in style are now worth 50-70% less than they did a year ago. And, the Buy and Hold crowd is thinning out. Enrollment has dropped at private schools. Real Estate prices are dropping in the Hamptons and in Manhattan and are expected to arrive at a point that is at least 50% below what they were a year and a half ago. There are some who predict that drops of 90% in value are possible if we truly hit the panic phase in the stock market and deflation accelerates. That’s possible. Not likely, but possible. This era of deflation may take all of ’09, ’10 and ’11 to play out. Not a pretty picture.
If that happens, none of us are safe from the financial devastation that will ensue. Social unrest will follow as it already has in the Eastern block countries.

Right now, newspapers and websites dwell upon salacious stories of fraud, murders, disasters and mayhem. Law enforcement personnel, like prime time players in old episodes of Law and Order, are busy trying to find someone to blame. Meanwhile, Wall Street continues to hand out bonuses for having papered the world with securitized debt that was worthless before it was packaged.

If they ever find out where the money went at Town Hall in Southampton, people might wonder if it really was all of those New Yorkers who are responsible for the mess after all. The Feds are at least looking to find out where the money went.

The Other Shoe

I never did give them hell. I just told the truth, and they thought it was hell.
-- Harry S Truman (1884 - 1972)


As the Monty Python players famously remarked, “No one ever expects the Spanish Inquisition.” Similarly, in the Hamptons economy, which is driven by real estate, no one ever expected the kind of financial problems like those in California and Kansas. Still fewer expect the kind of dire financial problems about to hit New York – not to mention the Hamptons.

While the current difficulties were clearly predictable several years ago, it is only now that there is a sense if dire fiscal eventualities, that will soon be upon us. Manhattan is no exception. With a predicted loss of 275,000 jobs on Wall Street; the disappearance of Investment Banks –-which was the driver of the worldwide expansion of money and credit; and virtual elimination of mortgage lending – a one to two year recession may take five years to play out. There are those who think that this country will not recover from this bout of deflation, which may turn into hyperinflation from printing all of those trillions for bailouts, until the early 2020’s.

The Spring selling season in the Hamptons has all of the earmarks of a temporary lift, which will last 3 or 4 months. Small properties, those in the $300,000 to $500,000 are starting to sell. Larger properties are sitting with no activity.

And, while there are some rentals, local businesses in the Hamptons will face stiffer competition and budget conscious tourists. The Town of Southampton may need Federal money to remain viable. The “business-as-usual” trend towards increased fines, increased taxes and harassment of New Yorkers may not be a good idea in these economic times.
The immigrant problem, which created lots of bad blood and a very negative attitude, will be solved by economics. Everyone is leaving town due to lack of work.

Freedom of the Press

Nearly all men can stand adversity, but if you want to test a man's character, give him power.
--Abraham Lincoln (1809 - 1865)


In Suffolk County there have been numerous Federal investigations into corruption over a period of decades – all of which were unsuccessful. One possible reason for this is that there was no corruption.

The other possibility is that it is so entrenched that the circle-the-wagons mentality, which maintains an elite club of crooked D.A.’s, repressive Police, bought judges and fearful media, makes Federal prosecutions very difficult. Political enemies must be willing to pay the price in Suffolk’s “Democracy.”
The Marty Tankleff case, for example, which the SoHo Journal has been writing about for several years is an example of how an innocent individual was targeted and deprived of almost everything we hold dear in this best of all possible New York counties. From the Suffolk D.A. on down the chain, including prosecutors, judges, and police – do not like to be called out on their behavior. Retaliation is the political norm in the Hamptons.

Currently there is more press freedom in the former Soviet Union than is tolerated in Suffolk County.


And, there is very little in the way of opposition in the media. True Journalism is becoming a dangerous profession. Bloggers write at their own risk.

In Russia and Somalia they shoot people for writing the truth.

In this country they indict them for anything that will get headlines.

As a result of numerous articles that exposed the shameful attempts to keep Marty Tankleff in prison for a crime that he did not commit; commentary on the cover-up and involvement in that travesty by the current D. A. Thomas Spota; the series of blogs by this writer exposing racism in the Hamptons and complicity by the D.A.’s outpost in Justice Court; and, as a result of the unconstitutional behavior by the Town of Southampton in dealing with New Yorkers, property owners and Latinos who live in these properties –- the Suffolk County D.A. ordered and executed a raid on the offices of the SoHo Journal and this blogger. It was a bold effort ordered by Spota to teach journalists that anyone who criticizes him or his corrupt administration can be reached with the aid of the New York City Police Department.
At least 20 Suffolk County Detectives with automatic weapons, supported by three 1st Precinct police including Sgt. Morales conducted the raid.

Business records were taken, personal property and valuables were confiscated and Detectives, who were seeking to silence any opposition to political corruption in Suffolk County and the Hamptons, removed computers containing articles and publication drafts. A child’s cell phone and an artist’s computer were also taken.

Detective Josef Miceli, of the D.A.’s Detectives division -rapidly becoming known to be an individual closesly associated with the corrupt political structure and repression - led the raid.

Miceli is a zealot run by Spota, who has fostered indictments and phony confessions from little old ladies, blacks and poor people for non-criminal violations – (such as the “Star Program” tax deductions). Convictions are obtained by threats of imprisonment and the impossible cost to fight a criminal complaint - which supports the D.A.’s “conviction rate” and subsequent budget demands for law enforcement. Detective Miceli, acted on a phony “tip” initiated by a former police officers working with Town Attorneys (who have already been sued in Federal Court for targeting and retaliation), in attempting to shut down the publication’s offices.

During the raid, one glock-weilding Detective stated, “You don’t like police in this magazine, do you?” as a SoHo Journal was picked up.

Well, Hello! Wonder why you would say that, hey fella?

You’re here for what, suppression of Free of Speech?

As Sol Wachtler once said, “district attorneys now have so much influence on grand juries that 'by and large' they could get them to 'indict a ham sandwich'." And, of course, that’s the plan.

As has been shown in “The Terror” during the days of Josef Stalin, pressure by the State using its unlimited resources can force confessions and threaten to create crimes where none ever existed.

Soon, the show trials will begin anew in America. Anything can be made to appear to be a crime in Suffolk County – especially against one is speaking the truth.
For eight years, civil rights and the Constitution have been whittled away by George Bush – and one can only hope that that will now change under Obama.

This is the current state of our Democracy in the Hamptons.

Freedom-loving tourists and New Yorkers, especially those who believe in Constitutional rights, should stay in Manhattan. Let the Suffolk politicians pay their own bills as they arrest anyone who criticizes them.

Just One More Question . . .

Every culture has its distinctive and normal system of government. Yours is democracy, moderated by corruption. Ours is totalitarianism, moderated by assassination.
-- Unknown Russian


Now that we have learned that $19 Million dollars is missing from the Town of Southampton, the question becomes – where is it? And when was it missing?
For those of you who have not been following the handwringing, remember that real estate taxes -- the money that pays for this government -- is severely reduced and likely to partially evaporate. California can't pay its bills, New York City is about to follow suit and the Town of Southampton may be an economic disaster area before the end of this summer. It should not be lost on anyone that Wall Street drove the economy and paid for the Hamptons government. It should also not be lost on anyone that Investment banks drove the Wall Street machine -- and that they no longer exist.

Of course, if you read between the lines, it’s not so much a question of where that missing Southampton money is now. It is question of how long it has been missing and whether the money was being massaged over the last several years compliments of nearly a decade of Republican “management." Can we be surprised by a group of buddies fed by Masterson’s highway department and his contracts for Town highway contracts and a Planning Board run by a developer named Zizzi? Now that Heaney is carefully ensconced in one of Suffolk County Executive Steve Levy’s mindless jobs to save his lifestyle, will the cover come off the can of worms?

Richard Blowes resigned (was fired?) today from his job and a few other heads may roll. According to Kabot he will focus on finding the $19 Mil.

Instead of asking Blowes, perhaps Heaney and the Republicans can help them find the money. The cell tower and cash on the front seat comes to mind in the last Federal investigation.

According to sources in the Blowes matter, Charlene Kagen who is mentioned in the news reports and who was the former comptroller maintained that Blowes was incapable of reading a spreadsheet. His salary was $118, 000 and he had refused to allow her to train her successor (the Town will now probably hire her back as a consultant to plow through the mess). She is currently Comptroller, Town of Brookhaven but was not able to be reached for comment.

Cheryl Kraft, head of Code Enforcement was also demoted and there may be some changes coming from that direction as well. Her salary was reduced to “only” $114,000. Perhaps, if the Town needs to do a Ch. 11 filing at some point – considering all of the off-budget legal fees defending against unconstitutional behavior – she may be asked to get lost.

Or, perhaps, Obama’s Justice Department will find the racist evictions signed off on by the Justice Court in tandem with the Town Attorney’s office -- might become interested in the unconstitutional behavior there as well.
Just to keep it interesting, George Guldi, former Suffolk County Legislator has thrown his hat into the ring. There are quite a few happy voters and, surprisingly, a few sour faces in the Suffolk County Democratic Party hierarchy. We’ll keep you posted.

Southampton Village Police Chief Wilson apparently has been spotted looking for a job in Las Vegas. That could be interesting. The motivation for that has not yet been established. It might be hotter here than there.

Seems that the Appeals court has found that D.A. Spota’s hounding of nurses who quit their jobs because of abuse -- by threatening criminal action against them and their attorney is a little too much like Stalin’s moves in the Great Terror during the 1930’s. As the appellate court ruled, a synopsis by Mitchell Rubinstein wrote:

“Both the lawyer and his clients [were] criminally charged with endangering the welfare of critically ill pediatric patients and related crimes because the nurses resigned en masse without notice. You might think that such a case could not arise in Twenty-First Century America, but in 2007 that is exactly what occurred in Suffolk County New York and resulted in a New York appellate court having to prohibit the criminal prosecution of both the nurses and their attorney. Matter of Vinluan v. Doyle, ___A.D.3d___, 2009 WL 93065 (2d. Dep't. Jan. 13, 2009).”


They don’t call Suffolk County a Police State for nothing.

Institutional Racism

A functioning police state needs no police.
-- William S. Burroughs

There is some speculation about the meaning of a recent report that Town Supervisor Linda Kabot and Board member Nancy Graboski will take over the control of Code Enforcement in the Town of Southampton. A meeting is scheduled on that issue on Tuesday. Of course, almost anything is possible in the land of a real estate driven economy where cash literally used to fall from the spec house cedar shakes. Now that the grim reality of reduced transfer fees for the Preservation Fund, slimmer taxes flowing from an impoverished class of landlords and property owners, and a budget that predicts disaster for currently overstuffed Town bureaucrats – something needs to change. Six figure salaries for any police officers are absurd in this economy, unless they have a gun to your head, literally.

This potential change in how “City Hall” is operated may reflect the growing awareness that the racists who have operated this badly trained Police force (Code Enforcement) have done nothing to improve the Town. The sub Rosa instructions to this paramilitary group which has been used to target political enemies and conduct a terror campaign against immigrants and the landlords who dare to rent to them, is the real point of their mission. The major drivers of this band of incompetents have been Cheryl Kraft, Steve Frano, Donald Kauth and David Betts (Town Investigator). Together, with their flunkies, they have pressured judges to sign search warrants to check for smoke detectors and gotten Town Attorneys like Joe Lombardo to deprive landlords of their property – instead of conducting a sane policy of educating property owners. Housing safety was never their concern. Most of these characters, incidentally, have been named in Federal lawsuits for unconstitutional behavior.
It has always been true that if housing safety in the Hamptons was the point, ALL homeowners would be invited to take part in a Town-wide campaign of education – and, not in the Stalinist sense of the word.

Perhaps, the raid against Kabot’s aunt during Heaney’s primary challenge was a key ingredient in a coming shift? Heaney ran on a platform of destroying immigrants and those who harbored them in their homes and schools. And, now he works for Levy, someone accused of a deeply racist agenda. Every politician from D.A. Spota to Representative Bishop participates in this little charade in varying degrees.
Perhaps, the numerous Federal lawsuits that are costing the Town huge legal fees for the unconstitutional behavior of a few local malcontents whose racist agenda are embarrassing – has some bearing upon this?
And, perhaps, with the complicity of the Town Attorney’s office in prosecuting landlords -- exemplifying a pattern of Institutional Racism under a new Justice Department -- may not seem so wise after all. The new Federal view of these antics may not play well in Washington.

Time will tell.

Historic Shifts

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

One of the problems with the blame game affecting the views of our contracting economy is that we fail to recognize the seismic shifts that occur among populations ranging from aging baby-boomers to new births – as well as flows of capital, business cycles and markets. The ebb and flow of capital and degrees of risk and risk-avoidance – as well as major financial cycles -- are outside of our control. Some of these sometimes generational factors are completely independent of toxic financial vehicles likes SIV’s and CDO’s and whether Bear Sterns or Lehman Brothers have taken the pipe. The shell games going on in corporate America are as much a result of the cyclical forces as they may be the cause of current pain. Even the Madoff fiasco is a symptom, not a cause. In short, nothing that the Federal government or we can do will alter what is about to happen.

We are entering a deep Recession that will become a Depression by 2011. During that segment in our history there will be a stock market rally lasting for perhaps several months, a very brief improvement in lower end real estate numbers and a resurgence of inflation – but will shortly be followed by an even more calamitous collapse.

Knowing this may or may not prevent the S.E.C. or D.A.’s office from trying to blame individuals for what is about to happen. But, it’s important to know that there is no correlation between specific events and the macro cycle we now face. The events we are about to witness are cyclical and inevitable. Those macro events currently affect the evaporation of capital, the downsizing of business and the deflation (and inflation) about to ravage the economy. The inflation, which will occur within the next year or two, will be short-lived and prepare us for the precipitous drop shortly thereafter.
Credible predictions for the local economy in Manhattan and the Hamptons see the loss of 4 to 5 million jobs, a reduction in the number of retail companies and stores through closure or bankruptcy, and a further deflation in the value of real estate. In the Hamptons, home prices will have fallen by 50% by the end of 2010. According Harry Dent author of The Great Depression Ahead, in order to arrive at values consistent with long term trends, real estate must drop between 40 and 60 percent from 2007 values in order to attain balance.


In Manhattan, where prices have just started to drop – meaning, that brokers have finally admitted that it is happening – the slide has just begun. Projects have stopped in some locations and commercial real estate will deflate at an alarming rate – which will cause bankruptcies and rents to drop precipitously. Harry Macklowe’s tribulations are a symptom of what will happen to many major developers and landlords.
Manhattan apartment rentals have already started to drop and we are only at the beginning of what will become a full-blown Depression by the end of 2010 to 2011. The reduction in services in Manhattan will be difficult to believe and the quality of life stemming from the relentless fines and fees that Bloomberg resorts to will sour any positive feelings towards his Savior image. A respite to this scenario may not occur until 2013 to 2016.

In the Hamptons, an economy that is entirely built and paid for on the backs of New Yorkers who buy summer homes and investment property, the only question is whether a Chapter 11 is in their future. In recent months, one broker described his business succinctly, “the phone doesn’t even ring.”
A broker in East Quogue reported that even the houses in the $300,000 to $500,000 range are not selling. Many McMansions have already dropped by 50% in value (if not price) – and have further to go on the downside.
There will be a modest upsurge in Hamptons real estate activity as people try to rent a summer house and pool their money to share it – as the Code Enforcement police (who will be getting pink slips along with many more of the Town of Southampton’s employees this year) try to fine and criminalize this last and only form of income.
Regardless of how Southampton Town or East Hampton Town treats this brief shot in the arm for the summer season, after the Spring “selling season” is over the slide in that economy will start in earnest. The deflation in real estate will be the new long-term trend – along with the tax base that once propped up the local economy. The brief resurgence of $200/barrel oil (which will collapse again to $30) will exacerbate local conditions that are made worse by with a corrupt political bureaucracy. The
flow of easy money in the Hamptons is gone and this will end decades of political incompetence.
Look for oppressive attempts by the local governments to squeeze money out of tourists and property owners who will abandon properties in growing numbers.

While the towns in the Hamptons might seek a political solution by reaching out to New Yorkers in order to solve the impending disaster by working together, that will not happen. Lip service was once given about hiring a Public Advocate to bring New Yorkers – who pay for the economy – into the local political process but until the vote is garnered that would not happen.

Sell all real estate if you can and buy 30-year Treasury Bonds. It will be a long and difficult ride. Even buying food (which will escalate in cost) will become an issue for many families.

A New Year in the Hamptons

Nobody outside of a baby carriage or a judge's chamber believes in an unprejudiced point of view.
--Lillian Hellman


A recent break-in involving several hundred thousand dollars of restaurant decor, fixtures and equipment was carted
away this weekend after an alarm went off in Westhampton Beach. The perpetrators produced a phony set of court papers to the local police officer (called twice on the matter). The police officer just waved on the workers who disappeared with three trucks full of merchandise. On the spot, the officer apparently had ruled that it had to be a civil matter while the alarm blared and the wires were being illegally ripped out. Seems like a little training might be in order.


In Quogue, the Motz case still hangs in limbo since the Christmas Verdict ploy apparently didn’t work. It appears that the stock swindle case will now be heard this month (instead of December) despite attempts to lessen the severity of the matter at hand. A new date is not yet set but is expected to go to trial this month.
Since the Federal judge is in his eighties, the plan to seek succor based upon age may not work. Motz is just a kid as far as he is concerned.
Federal prosecutors have a different level of credibility than local D.A.’s.
While indigenous D.A.’s, like Spota, are known to employ bag men for cooperating attorneys to obtain beneficial results for their clients, use corrupt cops for investigations and informers, and utilize docile jurors who are often half asleep – in order to obtain indictments -- the Feds are usually awake and have a point to make. Political targeting is big in the Hamptons.

Don’t expect too many different results in the Hamptons this New Year.

The Christmas Verdict

Crime does not pay ... as well as politics.
-- Alfred E. Newman

For those of you who were holding your breath waiting for the results of the “Quogue matter” involving the S.E.C. claim and indictment involving Mayor Motz – half of the dynamic duo running the Village (his wife Kitrick is the Village judge) – you’ll be happy to know that the back door is still open in the Hamptons, even on the Federal level.
Apparently, as a few learned attorneys have commented, the Christmas Verdict refers to a little known ploy that allows a defendant to go to trial when juries are least likely to convict and most likely to want to NOT be locked in a controversy. The case went to trial on the 19th.
It seems that Motz, or his connected Republican buddies in the Town and Village still know a few important politicians and sympathizers among those who prosecute these matters. Too bad Gonzalez isn’t still running the AG deals. The investment firm will now be convicted (no individuals) and Motz is likely to avoid any untidy outcomes. Money is not the issue, as recompense has been arranged – after the fact, of course. Only jail time was of a concern. Ticket switching is only a crime when Democrats or defendants without Republican connections are involved. There are lots of them in the Hamptons.

Looks like Quogue residents may continue to get what they deserve in Village government.

Happy Holidays.

A Dose of Reality

When a stupid man is doing something he is ashamed of, he always declares that it is his duty.
-- George Bernard Shaw


We hang the petty thieves and appoint the great ones to public office.
-- Aesop



As the Hamptons economy burns, the Southampton Town Board fiddles, the real estate industry implodes, Suffolk County D.A., Tom Spota arrests people. It’s not bad enough that Henry Paulson is saving his buddies at Goldman Sachs, JPMorgan Chase and Morgan Stanley -- by dishing out billions from under the TARP to cover them for the losses that they created by handing out mortgages to anyone breathing – now Spota’s Economic Crimes unit is busy trying to criminalize the people who accepted the largesse. The bogus paper known facetiously as CDO’s and SVI’s -- debts that were bundled into securities by thirty year olds pulling down $5 million dollar a year bonuses at Merrill Lynch, Goldman Sachs, Morgan Stanley, Lehman Brothers and Bear Sterns. One thirty year old from Merrill Lynch recently commented that he left the company with $20 million in cash and his only heartburn comes from trying to figure out how not to pay taxes on it.
You think he has a mortgage to worry about?


So Spota, seeing an opportunity to show what a tough guy and a great politician he is, along with his envious Detectives on a paycheck and all they can arrange under the table who try to “make” cases by threatening people -- went into action against the poor schmucks that Wall Street people targeted. Mortgage holders and real estate owners have always been the preferred targets of police. They try to pay their bills and they are law-abiding middle class citizens and investors – who in this case were conned into being part of the biggest Ponzi scheme in history – not Madoff’s – but the securitized mortgages scheme by Wall Street that generated billions in fees to everyone in on the scam even before the ink was dry on the bonds and notes. The middle-class homeowners who took the loans and bought the property that greased the economy are easy to intimidate and convictions are a snap. There is zero risk for cops. No drug dealers or hold-up threats here.
There was no way that the escalation of financing by Wall Street forced upon a greedy society (like the Town of Southampton where the party is now over) which pushed banks, mortgage brokers and real estate agents to push loans -- ever expected, or cared, whether the bill would ever be paid. That was never part of the equation. That never mattered to the kids pulling down $5, 10, or $20 mil per year. There were so many tricks in the fine print that Wall Street’s yuppies and CEO’s knew to take their fees first and move on before the shit hit the fan. That was part of the plan and when they finally acknowledged the Ponzi scheme that THEY had created, they were out the door and long gone. Of course, Paulson then had to bail them all out.

What is happening now in Suffolk County is the age old 90% -plus conviction rate game – the D.A.’s ploy to hold on to his job – boasting high conviction rates by picking on people who do not have the resources to defend themselves against bogus criminal charges. They know better than to go after the Bear Sterns executives because any laws actually broken (if there were any) were beyond the D.A.’s ability to prosecute. Better to go after middle class people who were the real victims in all of this – by virtue of Wall Street’s greed, mortgage broker’s greed and the greed of Towns and Villages with bloated economies and police forces pulling down a few hundred thousand a year.
Even local corruption, like the Masterson Southampton Town Highway department con game of collecting cash from pavers for contracts for the Republican Party, is ignored. That’s a political accommodation. Then, there are the local law firms (with partners in Town government) who have been illegally steering business to themselves and off-budgeting any hard legal work to outside legal firms at $500 per hour, while getting a kickback. That too, is ignored by the D.A.

Spota is a Republican despite the Democratic moniker. And, the D.A. recently cut a deal for himself after it became clear that his continued prosecution of Marty Tankleff (who was railroaded into prison for 17 years by one of Spota’s clients, a dirty cop) was a tad too over the top. He subsequently appointed a Special Prosecutor so he could go out the back door, who, low and behold, dropped the entire matter against Tankleff. Showmanship is part of law enforcement and the media is “malleable” in Suffolk. Aside from Tankleff’s release, some really positive results arose from the birth of such organizations such as the Fortress Innocence Project – a world class investigations agency that assists wrongly imprisoned individuals.
Jay Salpeter, who worked hard to help Tankleff,
is among its highly qualified staff.

In truth, Spota is better than Catterson, a D.A. who was a retaliative dimwit that practically ran a bag man operation out of his Suffolk County bar -- and who routinely got drunk with another recently departed bully, Dave Wilmot, the publisher of a now defunct comic book known as Suffolk Life. “News” was routinely leaked to Suffolk Life by the likes of Town Attorney Joe Lombardo when a character assassination job was needed on any targets who actually believed in the Constitution. Lombardo, known as a legal errand-boy for Heaney and the Republicans was given the job of executing Southampton Town’s anti-Latino racial bias and its concomitant landlord policy directed against New Yorkers -- and has been sued in Federal Court in part for his complicity.
Town Attorneys Joe Lombardo and Michael Sendlenski both operate a plea bargain program for the Town, ostensibly directed at code violations, in order to bring in fines while intimidating New Yorkers – who pay for the entire economy. While Town officials and friends of the police never see a visit from the Code Enforcement clowns, anyone who criticizes the Justice Court, Town Attorneys or Police are regular targets. Unfortunately, due to this corrupt system, many people have been forced to give up their property rights while a rumored “payoffs for constitutional rights” operation continues. Investigators have uncovered widespread abuse of the legal system where nearly 90% of the housing in the Town is substandard or below State codes yet, is ignored or tolerated. Code Enforcement is only used for targeting, not safety.

All of this is essential to the Southampton Town Attorney’s office operation which has followed Skip Heaney’s announced agenda against New Yorkers -- of prosecuting landlords and the taking of their property if they rent to people who are on their racist hit list (illegal immigrants, blacks, or Latinos). While there is often no illegality found as a result of the expensive searches, seizures, fines and plea deals -- coping with the cost for justice in a prosecutorial environment can be daunting, if not impossible. Silencing objectors, of course, is the point.

As Sol Wachtler once said, most prosecutors can get a Grand Jury to indict “a ham sandwich.”

Justice is ephemeral and in Suffolk County it’s based upon who you know, not whether you did anything wrong. A.D.A’s and Detectives in Suffolk County routinely threaten people on and off the job because they know that they can ruin a person’s life with any criminal charge that causes large legal fees and fear, despite their dubious legitimacy. And, as criminal attorneys will attest: those who lie the most on the witness stand with impunity -- are police and prosecutors. Many judges are blind to the game – until you get into Federal Court.
Recently, for example, scores of people were arrested for having unwittingly forgotten to advise the tax collector in Suffolk County that they are no longer qualified for STAR exemptions – and were arrested by the D.A.s office for something that is simply not a crime. It is a completely civil matter. There is no criminal penalty for the oversight – even if it was intentional. Old ladies, black people, working mothers and laborers were dragged in to court by Suffolk County D.A. Detectives. Everyone pleaded guilty, of course. They did not have the money or legal counsel to withstand the pressure. But, every aspect of it smells of intimidation.
Of course, you tell that to the high school grads at your door with badges and guns drawn. You don’t pick a fight with someone holding all of the cards. And, there’s the rub. Justice is expensive and risky. Suffolk County juries are not known for their legal knowledge. They are hand-picked by corrupt A.D.A’s looking for a raise or notoriety.
In Manhattan, the D.A. goes after criminals. Bob Morgenthau may not be a saint, but he’s alert, awake, and has a real sense of justice – in spite of his age and long experience. His top prosecutor, Dan Kastleman is as tough as they come, but does not prosecute people as a political favor to informers, police, or politicians. Not so in Suffolk County.

Police routinely move from on duty, to home security company, to informer. They may not have any balls left but they still have the urge to be relevant and feign importance – even when they step over the line. Until they are caught.

The Hamptons are known for its Police State mentality and the concept of retaliation for not going along with the program is acknowledged widely – so that the Town Attorneys, current and former Police officers, current and retired Supervisors or Town officials, Code Enforcement personnel – all have a vested interest in being informers and inciters to augment the Republicans -- the symbols of which are described by Seth MacFarlane as "an elephant, and a big fat white guy who is threatened by change."
Recently, in fact, where no criminal actions existed, in an environment of retaliation, D.A. detectives have been hiring out their services and doing personal favors both on and off duty -- to feed this illegal operation of acting to further personal vendettas using their badges. They know that this is an effective way to conduct what the NKVD perpetrated in the Soviet Union during the 1930's. It was called "The Terror." Rather than support of their efforts in the service of Justice, honesty and diligence, the D.A. and his Detectives would prefer to be feared rather than respected by the public. That was true of Stalin and Machievelli as well.

As the economy sinks further into the muck and mire – verging on a full-blown Depression by the year 2011– more illegality will be uncovered. But, it won’t be due to people like the couple in East Quogue who were accused of supplying incorrect information in order to obtain a mortgage -- It will be due to Hedge Funds who won’t (or cannot) return money to investors, financial institutions who cooked up securitized debt obligations and who knowingly sold off trillions of dollars of phony securitized mortgages to make commissions and signaled to everyone in the real estate market that they needed more and more product to feed their insatiable need for commissions, salaries and bonuses. The mortgage banks like American Home or American Brokers Conduit, as in the case of the East Quogue matter, were encouraged to package loans however they could so the loans could be passed off. So, where are the Wall Street boys in this so-called investigation? Oops, probably couldn’t get them to lie down on that end of the “investigation.”

Counties, Towns, Villages and even States may be headed for bankruptcy.

And, this is a ship of state that few realize is in much deeper trouble than anyone yet realizes. With the probability that another 4 million will be unemployed this coming year; with the probability that the foreclosure numbers will INCREASE over the next two years; and, with the reality that this economic pain is a worldwide reality for several years going forward – expect the Justice system to founder and collapse along with the Bankruptcy system, as it seeks answers while attempting to punish innocent victims in its bewilderment.

What we have to do is take the power away from the abusers in our society.
In the Town of Southampton, we must succeed in obtaining the right to vote so that Justice is a reality.

The Big L – Gloom and Doom Part 3

Here's what Richard Russell (Dow Theory Letters) -- one of the few market commentators with first-hand experience of the Great Depression -- has to say:

“The market is warning of a coming depression. Next year there’ll be a huge problem of unemployment, job openings will have disappeared, and every business will be going over its personal thinking in terms of who the business can do without.

“The sentiment in the country will be dark grey to jet black. Fortunes will have been wiped out. Thousands of savings plans and 401Ks will have been shattered. Americans who have never experienced true hard times will be living hard times. Confusion and fear will be rampant. How do I know all this? I’ve been here before, I know the signs.”


By now, even those among us that think economists are people who know what they’re talking about, realize this: that the genie is now out of the bottle. Few believe that the government has a handle on where this ship of state is headed, financially. Despite Wall Street and its current health, next year and quite possibly the year after, 2009 and 2010, will almost certainly be a disaster. Even if a traditional-style recovery on Wall Street were to start happening now, there is no imaginative vehicle, like CDO’s or SIV’s, that will be the “next big thing” to bail out this economy. Wall Street may recover slowly from here, but it is more likely that any rally that occurs will be a Bear Rally, to be followed by pain -- a lot more pain.

What lies ahead is not a V or a U – traditional symbols of a bounce in Wall Street that signals we are recovering. The big L is now what is predicted if we are lucky enough to avoid the big D.
This describes a long, long, slide down – followed by a very long period of flat or low economic activity accompanied by deflation. It is clearly NOT a period of recovery – it is a period of economic stagnation. Few new jobs, little housing activity and disasterous, permanent downsizing. Only afterwards, assuming that rational economic policy – worldwide – is put into place, can there be any growth.
If you doubt this, contemplate the fact that Japan was in the dumpster for 17 years before it began to recover. Contemplate the fact that real economic activity after 1929 did not occur until World War II – and that any stock purchased in 1929, which was followed by SEVEN major drops before it ended in 1932, did not regain its value until 1954.

We are now still on the slide. Housing has another year or two before it hits bottom. Many houses in the Hamptons have already dropped by 50% in value and Manhattan condos and coops are just now beginning to fall in value. Many of the sales figures that real estate companies provide are hype. Few brokers will tell the truth that activity has fallen by 30-35% and that prices are buoyed only be the averages artificially skewed by a few extremely upscale new developments which are as close to speculating in tulips, as one can imagine.
Price drops are now common. They will soon be the norm.
With 50,000 Citigroup pink slips, 10% of JPMorgan Chase employees being dropped and the combined redundancies at the Merrill/Bank of America merger, the Lehman fiasco and the disappearance of WAMU, not to mention the bank failures across the country – credit, capital and investment is fast disappearing. The recovery figures in housing are based upon limited sales – foreclosures and short sales. By the end of this year and next, several million more people will be out of work and the foreclosures may INCREASE rather than decrease as a result.
There are convincing arguments that we are, in fact, no matter what anyone does, headed into a Depression by 2011. This is based upon the cumulative begging, borrowing and stealing now going on by the Federal government – which uses printed money to solve an essential problem with our economic model. And, that is, there is a limit on how long you can pay your bills and the interest on your bills by borrowing yet more money. That process, created by massive leveraging, does end somewhere. And, since we are still leveraging our way out of this mess by printing more money, issuing more Treasury Bills, and bailing out more inefficient businesses, the end will not be pretty.

What is to be learned from this?
Nothing. This is our future.
Everyone needs to understand where we all going.
To know is to be forewarned.


Buying gold is a hedge but until grocery stores start accepting gold coins for bread, the only transactions that can be had are with Steve, the coin dealer. It is neither realistic nor practical to hoard gold. And, don’t forget, those who bought gold at $950 an ounce a few months ago, have lost $200 on that investment already.
Reducing expenses, downsizing your business, limiting unnecessary purchases and increasing your productivity are among the few things you can do personally. If you MUST attend a political fundraiser, be damned sure that he or she represents your needs and will give you real promises.

What may be helpful in knowing what is about to happen, assuming that GM, Ford and Chrysler do get a bailout or bridge-to-nowhere loans (since non are viable business models), is that voters need to keep a sharp eye on the politicians.
Forget Bush and forget Paulson – the Goldman Sachs CEO who bailed out his buddies on Wall Street first -- and then scrapped plans to buy the toxic debt which he used to convince Congress to give him the money. Paulson had resigned effective January even before he got the green light from Congress, so he’s already accomplished what he needed for his friends.

But, local politicians need to be watched like a hawk.

In the Hamptons, where a bankruptcy in the Town of Southampton is not unlikely, more local residents need to understand that the Republicans have been running things for decades. They are used to living off of the fat in the real estate game – by taking the property taxes and the transfer taxes intended for the Community Preservation Fund to run the government. Fred Thiele, former Town of Southampton Supervisor, buddy of Democratic County Chairman Rich Schaeffer and friend of racist County Executive Steve Levy – created the Preservation Fund to buy vacant land not to be developed. That fund has now been raided by Supervisors in East Hampton and Southampton in order to pay salaries and other expenses. In other words, instead of the painful decisions, they have dipped into that money improperly, if not illegally.

What does this tell you? It tells all of us that the source of funds to run the government – the money used to abuse New Yorkers, landlords, non-resident taxpaying property owners – has dried up. The entire local economy in the Hamptons is in deep, deep trouble. And still, like before, they exclude the ONLY source of money in their planning or government. Calls for a Hamptons Advocate fell on deaf ears in the past. That is unlikely to change with another administration of Republicans who only want power.
With wins by Obama, Pope and Schiavoni, the economy as well as the political landscape may change without their cooperation.

In Manhattan, there is more subtlety. But, change in Manhattan will come in the form of alternative political structures. The fact that Democrats control the agenda in a liberal or progressive city, may be challenged. As the economy tanks in Manhattan, politicians may find that they do not have guarantee of a sinecure in office.
Fundraising will change. The money will not be there.

As the budget decreases, as tax revenues dry up, and the City and private workforce decreases – and as deflation takes hold, politicians will have to work harder to retain the trust of voters. The Obama win will comfort many but change is the message – not status quo.

Politics and The Mundane Media

Politicians are like diapers. They both need changing regularly and for the same reason.
-- Unknown

There used to be a point in criticizing the media in the Hamptons.
There was the drunk who was rumored to have abortions in his own family pontificating to the general public about his support of “Right to Life” candidates, like virtually all local Republicans. Fortunately, Suffolk Life went the way of his abusive “whiskey ideology” which crucified any and all free speech that his politician friends wanted targeted. Wilmot was a guy whose best characteristics were his Stalinist methods at the “news.”
He and his reporters routinely serviced Republicans in the County, Town of Southampton and Villages like Westhampton Beach when they needed to even the score with anyone who disagreed with them. He and his publication were an extension of the police state.

Further down the food chain is the Southampton Press, whose advertising base is supported by the Republican Party as well. Having sucked off the ruling party elite for decades, news reports of DWI’s that went missing from police reports and evaporated from the “Police Blotter” that exposes anyone and everyone whom they want to embarrass – they too, have begun to read the tea leaves. No longer are the glowing reports of “Skip Heaney's” bouts with the Town Board such important press. But, the sycophantic need to report trivia and utter failure to check facts in their articles remains.

Currently the Press is pandering to the Village of Westhampton Beach’s Mayor Conrad Teller, a former cop who is scorned for his anti-business attitude, irresponsible handling of Village crime, and inability to govern without a gun. The Village Board and every appointment in this anti-Semitic and racist government grasps at straws in its attempt to silence opposition and free speech. Business it merely tolerated and no help is on the way.
So, who to call?
Well, the Southampton Press, of course.
When the glowing reports of the latest fundraising maneuver, like Highway Superintendent Bill Masterson who is one of the bagmen for the Republicans – by virtue of cash for highway contracts -- are losing interest – what to do?
Enter Conrad Teller.

Recently, finding that a critical point of view of the Democrats is dicey after Dan Russo was canned, a favorite of the Republicans, it seemed a better ploy was to fish around for less problematical stories. What better than do some favors for the Master of Disinformation in Westhampton Beach, Conrad Teller. Actually, Bugs Bunny would be better at hiding the fact that he is not only anti-Semitic but also anti-Latino and anti-business. He never saw nightlife that he didn’t like. Of course, when you fall asleep at Village meetings, there’s hardly a conflict.

So, Teller, who leaks policy through his appointees, like Barbara Ramsay of the Planning Committee (a local anti-Latino with direct control of the police) and Paul Houlihan of the Building Department, as well as Bridget Napoli, the NKVD-styled Code Enforcer who takes orders from the “insiders.” (Ramsay and Houlihan among them) -- and then denies or disagrees with these positions – manipulates the Press coverage of his dictatorship. Of course, only a newspaper, which is seeking to fulfill its mission as the Republican Party organ, would follow that ploy.

Tellers most recent manipulations have been the Eruv, which pits local residents against Marc Schneier of the Hamptons Synagogue and Jews – whereby he supports a fictitious separation of church and state movement (about black plastic on telephone poles), while voting for the issue in order to attempt to confuse his opponents. No one buys it.

The Southampton Press, of course, primes its reporters to follow the phony independent reporting mantra. The slant of stories is careful not to give away the farm. But, what they cannot control is the planned intent of their writing – which comes through by is massive ignorance of facts as well as its complete lack of fact checking. That was one of Wilmot’s major tools.
So, now that Teller and his racist-anti-Semitic bureaucracy have pulled some strings, a few “news” stories have started to focus on Westhampton Beach.
There is the major piece about “Silly String” which Teller planted for a friend in the Chamber of Commerce to create problems for a local business owner – and there is the Sunset Café story, which gained traction because it has the only Spanish Night in the area.
Barbara Ramsay and her husband, who live in the back rooms of two businesses on Sunset Avenue –a bureaucrat and insider in the Village –, managed to kill the application of the Sunset Café for outdoor music. The Village Attorney played along with the charade and, of course, no proof was necessary. No written complaints were ever produced. Only the words of the Secret Police. One local resident describes Ramsay is “tense.” Another way of saying that is “wrapped too tight.”
Of course, the no music, no nightlife, no fun – and certainly no Jews or Latinos – thrust of Teller and all of his bureaucrats – which is against public policy and racist – is also phony. Predictably, Teller followed up what he must have considered a devious press ploy – to kill the rest of the nightlife in his little Village. What better than to use this carefully crafted news story cooked up by Teller and Ramsay, of complaints about loud music one night a week INSIDE of the building 100 feet away from their back bedroom at 11 pm? In normal circumstances – if you don’t control the police – you knock on the door and ask people to turn down the volume.

Of course, that does not stop the Southampton Press. Because, it is the mission of the Southampton Press to interfere with any social trends that do not serve the Republican Party. In this case, no interviews were sought that would completely counter the news impression fostered by the Village.
While only Suffolk Life would give interviews to people like Joe Lombardo (Southampton Town Attorney), who trashed people that he was prosecuting -- the Southampton Press panders to Republican Party Chairman Marcus Stinchi (who lives and works in Westhampton Beach) in the guise of reporting news. And, Stinchi, of course, was acting on orders to create a problem for those who have sued the Town of Southampton for the same racism that works for Teller and Ramsay.

Don’t buy the media ploy.

And, don’t buy the one-sided news stories reported in the Press.
Silly String is a fun toy and the Sunset Café makes great coffee. Their Obama party was a success. And, it serves everyone, even Village bureaucrats. The fact that the owners of many year round businesses serve the Village at a loss most of the year, providing employment and life to the community – is never part of the news story.
Debates and healthy Free press are what made America great. More of it is on the way.

Hamptons Election Notes

The great masses of the people... will more easily fall victims to a great lie than to a small one.
--Adolf Hitler (1889 - 1945)

What most people don’t realize about the Hamptons is that it was one of the few locations that voted for Herbert Hoover. Residents of Villages and Towns were upset over what they percieved as Democrats who are infiltrating the Republican bastions. There has been much Republican hand-wringing over the incursion made by what they perceived as candidates riding Obama’s coattails to victory. The fact that Obama signs were being stolen or destroyed apparently didn’t help to change the election. A Democrat, Sally Pope, ran for Town Board in Southampton Town and edged out a hand-picked Republican incumbent. Linda Kabot selected Dan Russo, on the instructions of the Republican Party after a real Primary, which ejected Skip Heaney as Supervisor last year. And, Andrea Schiavoni forced out Tom DeMayo in the Justice Court. His penchant for signing stacks of search warrants for the Town Attorneys and the Code Enforcement police will not be missed by many civil libertarians.


above photo of Sally Pope (Town Board winner) & Dan Russo

Although Anna Throne-Holst is a Democrat, holding hands with Russo was more than a romantic problem. The supposed changes after Throne-Holst became the lone Democrat on the Town Board amounted to more than misinformed press pieces given to that stellar media source Hamptons.com. And, Throne-Holst's misguided attempt at a “Green Law” was just another sub rosa route for the Code Enforcement Police to get into your bedroom ostensibly to check for illegal immigrants. Russo, of course, simply lied to reporters of the mislabeled entities known as "news" organizations on many occasions and both Hamptons.com and the Southampton Press currently are scrambling to appear a little less right of center these days. Reporters like part-time real estate agent Andrea Aurichio must be looking for better sources after sychophantically writing what some of the Republicans handed out as facts -- which fact-checking normally would have identified as pure fantasy. Of course, most of what the Town Board, Town Attorney's Office and Code Enforcement do is actually geared towards investigating people rather than correcting problems. If that were not the case, there would be a system in place to notify owners of problems needing to be corrected. And, laws would be discussed with property owners, like New Yorkers -- who cannot vote in local elections -- yet.

Contrary to popular belief, having a search warrant issued by the Justice Court and breaking into property at 5 a.m. to check for smoke detectors is more reminiscent of the NKVD in the Soviet Union than a building inspection ordered to protect people. But, under the rules initiated by former Supervisor Skip Heaney and carried out by Fire Marshal Cheryl Kraft – the overlord of Code Enforcement – this is how Latinos, Blacks, New Yorkers and political enemies are targeted in the Town. Tom DeMayo played a big part in helping those particular wheels receive enough grease.

Thus it is useful to understand that the Razzle Dazzle was a card game made famous in Cuba when Fidel was still in the Sierra Maestra Mountains and Fulgencio Batista was still hobnobbing with Santo Trafficante and Meyer Lansky in Havana. It is a game that counts on suckers who believe that they are facing a dealer with a full deck and ever-increasing chances of winning. It’s a lot like the game played on the voters facing Republican ideology in the Hamptons. It’s rarely overtly racist or anti-Semitic – but the ante is constantly being raised when things don’t go according to plan.
The real name of the game in places like Southampton Town, Southampton Village and Westhampton Beach Village is corruption. This corruption, under the guise of a Republican ideological agenda and its sympathizers who ostensibly want to protect residents – is a form of political corruption that is anti-New Yorker, anti-landlord, anti-Black, anti-Latino, and anti-Semitic.
It also is the big threat of political targeting for those who don’t fall in line and buy the Big Lie. The police and prosecutors, the Town Attorneys, the Village Attorneys, the Suffolk County D.A. -- are the enforcers. It’s the political Razzle-Dazzle with teeth. And, in this last Town election, many people were watching what the Obama-effect would be after many years of trying to make voters believe that the anti-immigration policies that brought us the Code Enforcement “Terror” was just. These early dawn raids on immigrant women and children under the guise of searching for missing smoke detectors, replete with warrants and guns drawn, were reminiscent of the 1930's Stalinism during which even Americans were "disappeared." That we were to believe these raids were really instituted by politicians trying to protect visiting workers from faulty smoke detectors – and, that the objections to the Eruv in Westhampton Beach Village is really a “separation of Church and State issue” -- belies the corruption of these governments. None of us are stupid as they believe we are.

Donald Kauth, the head Code Enforcement cop, along with Southampton Town Fire Marshal Cheryl Kraft and Town Attorney Joe Lombardo were recently in court over one of these early morning anti-Latino raids. It was clear that they had been instructed to find a phony basis for their illegal and unconstitutional acts. The chain of command is Skip Heaney, the Republican Party, Linda Kabot, Dan Russo, Chris Nuzzi, Cheryl Kraft, Kauth and all of the boys and girls who blindly and obediently break the law to target opponents, Latinos, Jews, New Yorkers and the Democrats. Only now, with a Democrat in the White House and control of Albany, it’s not the Suffolk County D.A. but the U.S. Attorney’s Office that may have an interest in their activities.