Madoff impact on Manhattan real estate

I wonder also. The Madoff thing just adds to all the existing turmoil. Feels like so many things are a lie: RE bubble values, Wall St's deceptions, even the sale of the senate seat in Chicago.

I can't imagine this will force sales to an extent that would have any material impact on NYC RE. Maybe a few coops on 5th/Park.

There will be a noticeable effect, however, on the hedge fund industry in the form of more redemptions and increased demand for transparency. May lead to more liquidations in the near term.

I agree with faustus. This will more likely lead to more money running away from HF. Perhaps more HFs will close, and that may have a noticable effect NYC/Greenwich real estate.

I read he only worked with older jewish families on long island and palm beach. I can't imagine that the investors lost everything.

oh, just older Jewish families were affected. Seems ok then, thanks Julia.

shasha...I didn't say it was okay..I was expanding on the subject.

Liquidate what? There's nothing to liquidate. There was never anything invested.

some lawyer just got caught in a ponzi scheme... when the lights come on ... the roaches start scurrying... an ancient chinese proverb from washington heights :)

Even if some of these once extremely wealthy people are now insolvent, I don't see any of them selling off their homes. Their family legacy will probably be finished, but they will not trade down. I'm sure their homes and property were paid off years ago.

According to the Daily News, many (probably all) of these investors believed that the consistent high returns were the result of insider trading. As a result, they pumped more money in. If true, they deserve what they got -- or didn't get. (I know, I know, this has nothing to do with the thread topic. Sorry.)

noninterest, that's funny. Home paid off. No money. Campbell's soup $1.99 a can.

How can they afford the luxuries of life?

This is unfortunate. Many people appear to have been totally ruined financially by Madoff. How someone can do that is beyond me, especially when you consider that Madoff would have been able to do just fine for himself running an honest investment house. Greed is a terrible emotion, and ultimately it is the root of many of our problems as a nation today. I am as flawed as the next man, but I can tell you that I am happy today because of my personal relationship with G-d. There is an old saying that the man who is rich is the man who is happy with what he has. Clearly Madoff had no core values and no principles, otherwise how could he live with himself doing what he did. If you build your house on such an empty and weak foundation, it is sure to crumble. Pretty pathetic.

Sociopath is an underused word anymore, but it would seem to describe Madoff to a tee. He seems to have been unable to admit to $50 billion of losses years ago, paid old investors off with money from new investors.

The big story here is not that, but the (yet again) utter incompetence of the Bush Administration and the failure of Objectivism. Atlas didn't shrug; keeled over and died of a heart attack.

I remember a time when everything wasnot about conspicuous consumption, and that there was no shame in doing the right thing and being principled, even if it meant that you did not own a yacht, have a mansion, or whatever. I have been fortunate to do pretty well financially and avoid the recent pitfalls in the housing and stock market, but I also remember a time when many of my peers mocked me for being too timid or too conservative to become "really rich". I know for sure that there is no sure fire way to make money other than through hard work, and thoughtful investing. Generally, if a return seems to good to be true it is, and you need to get out and turn a paper gain into an actual gain, even if others think you are wrong.
I agree with Steve that the Bush years mark a low-point in our nations history. I mean, after 9/11, rather than calling the citizenry to service in the way T.R. or F.D.R. would have, he said go shopping. I think we really need to get back to basics.

Sorry for the many spelling and grammatical errors, I have a lot going on as I blog.

mh, much must change, & I'm not sure that the people we have in NY are up to the job. Government starts the problem, but not for the reason Reagan said. In fact, it was Reagan's deficits that got us here: he sold the idea that you could have your cake and eat it, too: lower taxes AND keep spending and spending and spending, because lower taxes meant, in the end, more revenue.

Sometimes it does, sometimes it doesn't. The fact is, with a few small notable exceptions (tax havens), the places with the highest taxes are the richest places in the world. You pick: Paris, or La Paz.

George II was the nadir of this discredited theory - make money by increasing risk and leverage and decreasing regulation. All that is is a house of cards. A giant Ponzi scheme. As are the finances of our government. New York is the worst - more spending on Medicaid per capita than anywhere, more spending on education than anywhere, more spending public services than anywhere, and very little to show for it.

People can blame the unions all they want - it takes two to tango. Heart disease is automatically considered a job-related disability for city police officers, whether it was caused by Dunkin' Donuts or not. "Tenured" kindergarten teachers. City mechanics can retire at 50. Come on! It used to be that public servants were paid less but got better benefits. Now they are paid more, have jobs for life, no accountability, AND have better benefits. Neat deal.

The fix to this is psychological - no, you can't have things that you don't pay for - and supply-side: make the public sector accountable, and efficient. Because at least in New York it will take decades before we reach last year's income levels. The engine of the city and state's economy - Wall Street - is now officially dead. Jobs are being exported to Charlotte, or eliminated. Leverage is cut from 40x to 10x.

The Chinese seem to own the world.

I completely agree. We need to pay for what we use, and governemnt needs to be efficiant. Your example of heart disease is perfect. We as a nation spend billions of dollars for medical care for issues that could be resolved by lifestyle changes. I assure, if health insurance was priced the way life, disability and auto are, we would have less obese, undisciplined people walking around. If we are going to make real changes, we need to evolve into a country where individuals are forced to take responsibility for their decisions. I have no problem paying taxes, but why should the teacher's union be able to waste so much money just because they kick-up to the democratic machine. I think we may have reached a point where we no longer have the luxury of being irresponsible, and we need to actually perform.

steve: please stick to discussing real estate in ny, you have a dangerous propensity to simplify the extremely complex when you are discussing anything else besides manhattan real estate...the chinese own the world where did that come from? They are in the process of following the same exact policy to reinflate their bubble that the US and the rest of the world is following...DEflation is a b*&$#

as for the other mumblings you just wrote I don't know what to make of it...except you may need a xanax.

"we need to evolve into a country where individuals are forced to take responsibility for their decisions."

Socialized medicine does that. It allocates medical care not on the basis of who can pay, but who needs it. No hip replacements for 93-year olds. No fee-for-service payments. I just dropped my old dentist because he was always figuring out new ways to get me to spend more money: cleanings 4 times a year instead of 2, unnecessary x-rays, replacing perfectly good fillings because they were "old"; every time I went in there he found something else: "Oh, this tooth looks like it's dying. You might need a root canal."

Just pull the sucker. (But it's actually fine.)

"I have no problem paying taxes, but why should the teacher's union be able to waste so much money just because they kick-up to the democratic machine."

Not only Democrats in New York - the Republicans are to blame just as much if not more here, since their hold on the senate was so tenuous for years.

Why are their 10,500 municipalities in New York? What about county-level government? All the school districts on Long Island?

I lived in the UK under Margaret Thatcher, and for all her faults, she was right for the time. She even reformed Labour. I remember the poor Neil Kinnock trying to debate her in Parliament.

GM is afraid of a prepackaged bankruptcy, because they don't want to make the hard choice. Here's my solution: give them a bridge loan until March 31, when they must present a plan that an overseer will say works. Don't call it bankruptcy if you don't want, but make it de facto bankruptcy.

Now we need basic reforms, because there is NO WAY we can support what we are spending with endless credit from the Chinese, or from anyone else. We can't stop the spending right now because demand-led reflation is absolutely necessary since the world collapsed upon us after the Lehman fiasco.

A little bit of competence would go a long way.

republicans/democrats...we're not going to find competence in albany or washington..we're on our own. Canada is looking pretty good about now.

"Canada is looking pretty good about now."

Except it's cold.

Hubby and I were out in SoHo earlier this week, heading to dinner, and we ended up walking behind a twenty-something who was screaming into her cell phone, "what do you MEAN our father lost twenty million dollars? He couldn't have put all the money in one place! Our father couldn't possibly be that stupid!"

Even if Madoff's investors were motivated by greed, their actions touch their families, and my heart goes out to them.

To get back to the topic, it will lead to some distress sales -- the question is how quickly and where. This might force some second or third homes onto the Hamptons market, but it's probably unlikely that the Manhattan co-ops will be affected.

ali r.
{downtown broker}

"the chinese own the world where did that come from?"

flmd, you have a dangerous propensity for literalism. I was referring to the amount of cash the Chinese government has, versus the amount of debt the US government has. They can reflate their economy with capital; we have to reflate ours with more debt.

That is not "the same exact policy" - it is very different.

Buy a house on your credit card, buy one in cash. No difference?

"I don't know what to make of it"

Then don't say anything about it. mh23 apparently understands it.

The Chinese will own the world (cockroaches and all) because of their proverbs.

"but it's probably unlikely that the Manhattan co-ops will be affected."

If the only wealth you have left is your real estate - guess what?

Julia - your comment abouts Long Island and Palm Beach Jews is disgusting -- you comments are often so ignorant and stupid that it is shocking. I used to just pity you for sounding so dumb all the time -- but now you have made statements that smack of antisemitism and you should be banished from these boards. Shame on you.

I know of 5 older couples (70s and 80s) on the East side that had all money with Madoff. Not all are Jews. So unless social security can cover the maintenance these couples are very unfortunately screwed.

MF, I wouldn't read too much into julia's comment about Jewish families. Not brilliant, but certainly not as bad as the thread that got deleted.

It is a horrible event and we are beginning to see how deep it goes and who got really hurt. Thing is, this money wasnt insured or backed, its just gone! Simply amazing.

The bigger factor is the loss of TRUST that may ripple through the HF world, if it hadn't already. Think of all the redemption requests that will come from this scam, as nobody trusts anyone anymore. Cockroach theory in full effect!

Im sure this event will ultimately lead to more forced selling of assets in the next few months as redemption requests soar amidst the loss of trust and confidence in managers of people's fortunes!

PS: I dont mean forced sales of Manhattan apartments, although Im sure there will be a few as a direct result of this. I meant forced selling by HF's to meet redemption requests as a result of this scam and the loss of trust that will occur.

Unfortunately, it will result in a few forced sales:

“There are people who were very, very well off a few days ago who are now virtually destitute,” said Brad Friedman, a lawyer with the Milberg firm in Manhattan. “They have nothing left but their apartments or homes — which they are going to have to sell to get money to live on.”

http://www.nytimes.com/2008/12/13/business/13investors.html?sq=madoff&st=cse&scp=6&pagewanted=all

"I meant forced selling by HF's to meet redemption requests"

Many hedge funds have stopped allowing redemptions.

MH23 & Steve: Agree. I think greed, denial & the death of common sense have lead us here. Seems that once someone enters a position of power (gov or industry), they lose all common sense & discard the concept of a budget.

Ali: Thank you for the anecdote. Wonder how often that scenario was & will be repeated. This situation will probably cause forced sales at the upper price range.

flmd: NY RE does not exist in a vacuum; various factors discussed in this thread effect it. Gestalt.

UD: Yes, lose of trust in our institutions and people. Diogenes.

and many still allow but will ultimately halt new redemptions which never bodes well for business

i happen to know a number of people involved in this. There were hundreds of rich individual investors in Manhattan who gave Madoff very substantive parts of their net worth. While I dont think this alone has a big impact on the city, there will undoubtedly be a few forced sales as a result of this. Oh, and far from all of Madoff's clients were Jewish, as if that really matters.

I feel horrible for the victims. Even if they thought he was doing some voodoo, it's still unbelievable that he knowingly ruined their lives as he smiled to their faces. Yes, a socio/psychopath.

I follow Steve's argument. I guess what I am saying is that, we need to get back to a point where people are willing to do the responsible thing, and government acts in a manner that is meant to serve rather than exploit or profit from the citizenry and the power that they have as public servants. We cannot forever be a country that only accepts instant gratification, we need to return to a place where collective sacrifice, determination, and common sense morality and decency are the order of the day. One of my personal heroes, Theodore Roosevelt, would not tolerate what is going; whether it is the environment, the economy, foreign threats/wars or the overall decay in values, T.R. would stand up to all of these issues, and he himself would serve as a living example on how things should be done. For goodness sake, the man delivered a speech after being shot because he refused medical treatment until after he completed his "duty".
For anyone wanting a great read, The Rise of Theodore Roosevelt by Edmund Morris, or, if you want something a bit smaller and faster paced, but equally as entertaining and inspiring, The River of Doubt, by Candace Millard.

Ultimately, this is what happens when someone can't admit the truth. Madoff: couldn't admit he had incurred all those losses. Investors: couldn't admit that what seems to be too good to be true probably isn't.

Not that I'm blaming the victims because I'm not, but that much concentration under the circumstances that are coming to light is irrational. Unless a company is audited by a Big 4 accounting firm, I wouldn't put my money in them.

Hey Patrick, I just reported you for abuse. There are some nice enclaves in Idaho just waiting for your kind bro.

Agree with a lot of points made here. I know a lot of people who came from money, precisely the kind of families (i.e. made fortunes from retail, not ultra-sophisticated investors) who might have trusted Madoff. Their kids bought all-cash 2-beds, 3-beds, studios, with family money. Now, those might be the only assets left.

I know socialized healthcare well, and while some of it is scary (delayed diagnoses), it sucks if you have some money that you'd like to use to expedite care but if you don't have enough to go to Mayo Clinic, etc., generally it works well for the population as a whole.

We can't afford amazing healthcare for everyone. Don't get me started on the million-dollar IVF/Clomid multiples.

Patrick_Bateman started the anti-Semitic thread that got deleted, I think.

dwell seems to agree with me.

And bfgross.

Time for him to be blocked.

"We can't afford amazing healthcare for everyone."

Everyone wants to live forever. Can't happen.

I agree with Bateman completely. Take Nick Leeson from Barings, Jerome Kurveil from SocGen, John Bennett from New Era Philanthropy, Joseph Jett at Kidder, shall I go on? How about corporate America, Ken Lay from Enron and Bernie Ebbers from Worldcom, plus Joe Naccio over at Quest, Martha Stewart, Chainsaw Al at Sunbeam, Walter Forbes from CUC (Cendant), I could go on

Patrick Bateman, please expound. You began a thought and didn't finish it. You named 4 frauds uncovered over the last 8 years and some of the individuals involved (for some reason not mentioning Jeff Skilling w/ regard to Enron or Daniel Marino with regard to Bayou). You infered that the 4 individuals you named were Jewish, and you are trying hard not to streotype, but... what? Please finish your thought because I doubt you will find someone else on here that can finish that thought. This evidence that is bizarre and overwhelming is evidence of what, exactly to you?

In fact, Jason, Bateman, perhaps this is deserving of its own thread, I suggest you start it. And while you're at it why hide behind an alias, you should have nothing to be afraid of as your thoughts are probably all valid, what's your name?

Sorry - Patrick Bateman - forgot, confused the fictional psychopath with the actual actor.

Bateman is just an anti-Semite, he has no interest in a serious discussion.

You know there were some gays involved in these scams, as well. Especially the Martha Stewart and Enron scams. I'm beginning to see a Homo-Semitic link that should be investigated by the authorities.

In fact, Snow White was a slut. Let's start there.

I was repeating what the NYT wrote...I never said anything that was anti-semitic. This blog is getting so boring with the same old boring slights and angry people. Only a few..frontporch, stevejhx have anthing to say of interest.

People, relax. I'm just trolling. If it makes you feel better, there is no "trend" and the stereotypes associated with a certain unnamed culture are not rooted in some degree of unfortunate truth. Certain value sets (or lack thereof) have not been highlighted by others, and fortunately, no one else shares my views.

Patrick, there are good & bad in ALL racial, ethnic & religious groups so please try to not be small minded; I hope that your mother attempted to teach you better.

Patrick_Bateman: People, relax. I'm just trolling.

Dangit Patty.

sorry if this is obvious, but what strikes me so strongly about madoff is that he was evidently a rip-off artist who promised that he was a steady, boring investment manager. it's chilling to think that he preyed on people looking for something safe. he wasn't exactly a flashy young kid with a few stellar years at a hedge fund who said, "oh, sure, I can keep these huge returns going," where an investor would have to be pretty starry-eyed to believe it.

one other thing - I think we should THANK OUR LUCKY STARS that this Madoff thing came to light AFTER November 15, which was the year-end deadline for many hedge fund investors to request withdrawals for 12/31. If the economy is in trouble mainly due to a crisis of confidence in basic financial institutions and in the larger economy, we could have had every hedge investor who has a big chunk of their wealth concentrated in a few funds just go apesh*t, and cash out every cent they could. The degree to which that has happened already has been horrendous for the stock market, and to imagine it having been even worse is just ... well, unimaginable.

I mean, just in perspective, so many of the Dow components have already been scraping 5-year lows for the last couple of months ... what would that look like if we'd have had even MORE fear in the markets?

Yes, how wonderful that people are now stuck in hedge funds that they would love to exit. Hate it when the market reacts without constraint to real-time events. Hedge fund investors are probably, as a whole, not my favorite group of individuals, but still.

I just heard that the feds can take the money away from the early investors who were paid with the money from the later investors.

There is a rule that you aren't supposed to invest more than 5-10% of your money in any one place- my father, a financial advisor for 50 years told me this. Basically these people were greedy and wanted these, albeit fake, returns. It's sad but this is what greed gets you. In this case the poor house.

Yes, cccharley, but I know he also took down at least one respected charitable organization. Greed for good?

No individuals, organizations or charities should have had more than 10% of their portfolio with Madoff or any other investment area / fund.

Clearly people that lost "everything" (or nearly everything) didn't understand what risk really is; but now they certainly do.

Is it okay to rip-off people, live a luxurious lifestyle, as long as a chunk of the money you've made goes to charity?

Perhaps after this financial atrocity, America will begin to rethink its philanthropic value system.

I think the problem with portfolio diversification issue is that while people held their assets at one location (normal to have brokerage accounts at one house with SIPC insurance) -- they would diversify and have 10-20 picks of stocks and/or bonds.

Why are we surprised at all?

This was another bubble caused by idiots.

Did you know that Andrew Cuomo put his CAMPAIGN FUNDS in a hedge fund. So much for "long term". That god his election was a couple years back, but still....

Name a stupid mistake, and you'll find tons of "smart" investors who lined up to do it.

well, I just read an interesting list of people who've admitted to having been duped by Madoff, including major banks - wow

I'll never be in their positions, but I can't help thinking that I'd rather have paid $15 million for a CPW condo and then been told it's only worth $7 million than to have invested $15 million of "cash" and then learn that it's worth zero, and my recourse is to hire a law firm to ***try*** to recover a pittance.

Mrs Blogs, I wasn't talking about Madoff's charity, I was talking about at least three others who lost substantial amounts of money. I agree it was unwise to invest too large a percent of a charitable organization's assets in any one place, I was just pointing out it wasn't all "greedy" investors.

Lowery, you have a point. At least you have a lovely condo with a nice kitchen in a good location.

"I'll never be in their positions, but I can't help thinking that I'd rather have paid $15 million for a CPW condo and then been told it's only worth $7 million than to have invested $15 million of "cash" and then learn that it's worth zero, and my recourse is to hire a law firm to ***try*** to recover a pittance."

Difference is.... if you only had $5 million, and you borrowed to afford the $15 million.

With Maddow, you can only lose what you put in. With CPW, you could lose more if you didn't pay in cash.

The hedge fund of funds who invested as feeder funds typically leveraged. I heard it is as bad as 3 to 1 leverage and that magnified returns and now would also magnify losses. Most of the investors came in through the feeders. I'm just mentioning given your example of CPW and mortgages.

You are confused about the leverage here.

The leverage you are talking about is WITHIN the fund. The way funds are structured, you can only lose what you put in. Like a corporation.

With a mortgage, you can put 20% down, but you owe that 80%. You can lose more than what you put in.

Actually, with Madoff, you could lose what you put in and whatever gains you might have made over the years.

A friend of a friend in Palm Beach lost $50 Million. That's pretty much their entire net worth excpet for their house. I would imagine they would have to now sell the house to raise funds. What a horrible horrible thing to happen.

I think the clawback goes back either 5 or 6 years. Then again, you would never pull it all out, since he was so good.

OK fair point. I think I am saying someone loses the rest - i.e. BNP or whoever provided that loan, but yes you are right that it isn't the same entity. But still with real estate, you will have some hard assets (obviously depending on how badly the market sinks and how much mortage you have paid off, the value fluctuates).

It will have a POSITIVE impact on real estate. People will want to put their money into something that they can see and touch!

> It will have a POSITIVE impact on real estate. People will want to put their money into something
> that they can see and touch!

Not when its sinking like a rock....

> Actually, with Madoff, you could lose what you put in and whatever gains you might have made over
> the years.

Still less than what you could lose in leveraged RE... which would be that and more...

Something they can see and touch is their savings account. You would be amazed at the inflows the banks are having. We're turning Japanese!

can you "touch" a treasury? if you go through treasury direct?

cause folks clearly running to those...

the difference between the assets of a CPW condo or the funds in a hedge fund is that there's some use for a condo - you can argue about the "value" of that use, of that tangible, concrete asset, and whether that granite countertop makes it worth X or Y, or its view of the Park, whether someone would ever buy it from you, etc. - OTOH, if you had your money in a hedge fund that wasn't Madoff's, you could cash out your "value" quickly

Quick question for finance people - with everyone running to Treasuries, does that make it easier for the US to fund its rapidly increasing deficit? Or is it just forestalling the longer-term financing of debt? Thx

Let me get this straight: We're screwed if we go into debt, and we're screwed if we pay down our debt? Is there a happy medium of spending exactly what we earn, keeping debt steady? Or are you saying we're just screwed, and debt levels don't actually matter?

I don't know that they can claw it back. How can they prove that it wasn't a real return, and how will they know whom to sue?

But I could be wrong.

hotproperty = steveF

"the difference between the assets of a CPW condo or the funds in a hedge fund is that there's some use for a condo - you can argue about the "value" of that use, of that tangible, concrete asset, and whether that granite countertop makes it worth X or Y, or its view of the Park, whether someone would ever buy it from you, etc. - OTOH, if you had your money in a hedge fund that wasn't Madoff's, you could cash out your "value" quickly"

True..... but "shelter" isn't going to offset $15 million in losses much.

It's an awful lot to pay for shelter and the use of a microwave and the enjoyment of a Central Park View.

Steve,
There is indeed a long term clawback with ponzi teams. It doesn't matter that you can't prove it wasn't a profit. I don't know the particulars, but google it.

has to be.... or folks who were "in on it" and got money in the beginning as "investors" would be able to keep it...

I think only if you can prove the investors who withdrew knew it was a scheme, can you take the money back.

ps - Joseph Nacchio is Italian

Manhattanfox called me cruel names because I said the people Madoff targeted as investors were Jewish. The Today Show this morning said the exact same thing he targeted Jewish people in Palm Beach and Long Island. People like Manhattanfox and others should think before they post hatefilled speech.

Bloomberg is reporting that Yeshiva University's endowment did indeed invest part of their money with him, and the loss may be as high as $140 Million. You never know what losses like this might do to expansions or renovations at a University. I hope this is the turning point for the ending of the opaque private investment firm for non profit funds.

"I think only if you can prove the investors who withdrew knew it was a scheme, can you take the money back. "

Not if the profits weren't actual profits.

If the fund itself lost money, but the first investors were given fake "returns" to make things sound better, they were handed other folks' money.

The underlying investments didn't make money. So there were no profits to pay.

Those original folks just got old money, not returns.

The money isn't theirs.

CNBC has BREAKING NEWS: Cox will investigate SEC's conduct re: Madoff. That's breaking news????? That should be a given. Why is Cox still in office? or Paulsen? I'd fire these idiots asap.

here is some detail on what I was saying... from Crain's...

"Carl Loewenson, a partner at law firm Morrison & Foerster, says a court-appointed receiver or bankruptcy trustee could argue that customers who cashed out should be ordered to return their money to help cover losses suffered by Mr. Madoff’s victims.

“The money that early investors got is just someone else’s money,” said Mr. Loewenson, who serves as receiver for victims of the Credit Bancorp Ponzi scheme, which involved $200 million of losses."

dwell...the people Obama has appointed for treasury, etc. are as bad, if not more than Paulsen. They started the deregulation. Nothing is going to change..i fell for Obama's speeches but unfortunately I don't see any difference between him and bush and clinton except obama can give a speech.

I somebody impersonating Julia? I tought she was a little dumb, but not as phenomenally so...

I think she was always this dumb...

"Nothing is going to change."

Agree, Julia. c'mon guys, don't attack Julia.

and a merry christmas to all!

Julia, while I hear your point that the Geithner/Summers presence is not exactly a breath of fresh air, I still think there is quite a bit to distinguish Obama, and yes even Clinton, from Bush. Remember, Volcker's in there too. Krugman had a funny comment today how he and a couple of others used to talk at Princeton about the horrors of the Japan situation. One of those commentators was none other than the bearded one himself. Time will tell.

you're kidding - right? Geithner's background is in public service. And, running the new york fed, he's been intimitely involved with the issues surrounding the collapse of financial institutions. Unlike Paulson, he's not a wall st. insider and, as a consequence, is likely to bring a very different set of values and priorities to the job.

I agree his background is a vast improvement from the I-bankers who've been running around, but he's been intimately involved in the TARP process, he isn't going in alone (many felt that Summers was initially, the first choice) so who knows what is up. Geithner also made some calls a few years ago warning of potential areas of instability (for all it was worth), which are only to his credit. And, as I said, there is the return of Volcker. I was really referring more to the Summers portion of the equation, I don't think you can discount Summers' presence that much, at least not yet. Bernake's also been intimately involved with the issues surrounding the collapse of financial institutions, and look at what took place today.

CNBC: Lawyer suing Madoff said 90% of his clients had all their $ in the Madoff fund (people are left w/ just $1,500 in a checking acct) & now, they are forced to sell their homes.

So, answer to original qu of this thread: yes, it's causing forced sales.

Jeanne Levy-Church bought in the Prasada, but I would think her Madoff funds are a small % of her inheritance, no?

I have no idea.

I find the Madoff scandal almost as upsetting as BS & Lehman. So many things seem like an illusion & gravity has evaporated. So many have lost so much in the blink of an eye. Ephemeral transience.

Looks like coops aren't safe from Madoff. Some co-op buyer are backing out because they had money invested with him. I wonder how many co-ops saw a buyer with $5MM invested in a hedge fund and said "sure, you can afford that $2MM apartment..."

From Curbed
Brad Friedman, a lawyer representing about 100 investors primarily in New York and Florida, said several clients have already said they plan to put their apartments on the market. They depended on their Madoff investments to pay their mortgages and co-op fees.

Other buyers have already backed out of deals because they had invested with Mr. Madoff and can no longer finance their purchases. Michele Kleier, a prominent Upper East Side broker, had buyers pull out of purchases on two $2 million apartments because they had lost money to Mr. Madoff. The first buyer put in an offer at 3 p.m. last Thursday, the day of Mr. Madoff’s arrest, only to withdraw it by 5:30 p.m.

The second set of buyers had visited an apartment three times, requested the financial information about the co-op and had the broker notify Ms. Kleier that they would be making an offer on Monday morning. On Monday, she learned that the buyers had backed out because their money was tied up with Madoff funds.