A Prime Crisis
≡ by the Mysterious Flying Miser ≡
From Forbes 17May2007:
“The subprime mess is grave but largely contained, said Federal Reserve Chairman Ben Bernanke Thursday, in a speech before the Federal Reserve Bank of Chicago. While rising delinquencies and foreclosures will continue to weigh heavily on the housing market this year, it will not cripple the U.S. economy, he said. The speech was the Chairman’s most comprehensive on the subprime mortgage issue to date.
“‘Given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited,’ Bernanke said.
“In March, Bernanke had said that the problems in the subprime market would only ‘reduce somewhat the effective demand for housing.’”
From The Business Insider 21Aug2009:
“The worst of the fearmongers–once deemed irresponsible and panicked by much of the markets–have been proved to have not been fearful enough.
…
“Except this time the toxic mortgages aren’t fancy at all. They’re regular old prime mortgages. That’s right. Last quarter, prime mortgages accounted for 58% of foreclosures. And among theose prime mortgages in foreclosure, the largest segment–32%–was composed of fixed-rate mortgages.
“… This puts fixed-rate, prime mortgages close to where subprime adjustable rate mortgages were a year ago. Of course, the overall level of prime mortgage foreclosures is still far lower than subprime foreclosures. Just 9% of prime loans are in foreclosure, versus 39.5% of subprime loans. Both rates are still climbing.
“To put this slightly differently, the serious deliquencies on prime mortgages now stand where subprime were back in the third quarter of 2007. By that point we were well into what was then quaintly known as the ‘subprime crisis.’ So it’s fair to say we’re now experiencing a prime crisis.”
From the Orlando Sentinel:
“The downtown Orlando Sheraton is headed for the auction block next month, now that the hotel’s owner has failed to come up with a plan to emerge from bankruptcy.
“The hotel, which sits at the north end of downtown near Interstate 4 and Lake Ivanhoe, is scheduled for a Sept. 3 foreclosure sale. Its owner, CF Hospitality Inc., said it is not generating enough cash flow to cover all of its bills. ‘There was no plan that we could execute to … come out of bankruptcy,’ said Edwin Reisz, who was brought on board as president of CF Hospitality after it filed for Chapter 11 bankruptcy protection in May 2008. ‘We didn’t want to get our vendors into a position where they weren’t going to get paid.’
“In addition to owing millions on its mortgage, the hotel has debts owed to unsecured creditors totaling between $200,000 and $300,000, said Brett Marks, a lawyer with Akerman Senterfitt who represented the creditors’ committee.”
From Indystar:
“David A. Marsh, former executive of the supermarket chain that bears his family’s name, has been sued for falling behind on loans connected to his multimillion-dollar house on Geist Reservoir.
“Marsh hasn’t made a payment on the 11,800-square-foot home since March of 2008 and banks are threatening he may lose his house to foreclosure should he continue to default, according to a lawsuit filed in Hamilton Superior Court 3.
“Two separate lawsuits have also been filed against Marsh in Hamilton County courts. In all, Bank of America, JPMorgan Chase and Fifth Third Bank want to recover $3.3 million Marsh borrowed for a mortgage and two other loans that offered his Fishers home as collateral.
“The house is currently listed for sale at $2.2 million. When originally put on the market in 2007, the home was listed for nearly $4 million.”
From CBS News:
“Five tigers have joined the ranks of those threatened with losing homes to foreclosure in Ohio.
“The animals are cared for by Jose and Denise Flores at their Tiger Paw Exotic Rescue Center outside Ashland in north-central Ohio. The couple fell behind on their mortgage payments after Jose Flores was laid off several months ago from his job with a tool company, and their property is scheduled to be sold in a sheriff’s auction Aug. 24. Their lawyer has filed for a stay.
“Denise Flores says she doesn’t know where they’ll be able to go with big cats Tazzie, Ticha, Katie, Delilah and Sammie. Three of the tigers were adopted from a woman who had bought them at auction, a fourth had been hurt by a dog, and the fifth is the offspring of two of the others.”
Last quarter, prime mortgages accounted for 58% of foreclosures. And among theose prime mortgages in foreclosure, the largest segment–32%–was composed of fixed-rate mortgages.
A-ha. I had been wanting this statistic. But I think it’s a little misleading. Sure, 32% of the prime forclosures are fixed-rate. But if fixed-rate is the “largest segment,” what are the other 68% comprised of? It must be a mix of different risky exotics. ARM, I/O, balloon payments, neg-am, and other fantasies. 68% is a pretty high percentage for risky mortgages.
That’s a good point. To my mind, there are two types of rates: fixed and adjustable. I wonder what they’re talking about …
Duh. Maybe I should read the link.
Here’s the breakdown of all foreclosures:
32.4% prime fixed
25.1% prime adjustable
13.2% subprime fixed
20.2% subprime adjustable
9.1% FHA
In two years, FHA will be at the top of the list with the highest percentage of foreclosures. FHA=New Subprime! I am somewhat surprised that it is already making up 9% as FHA wasn’t really a big player during the boom as people were using 80/20 loans to avoid mortgage insurance.
What about Ginnie Mae? There was a recent WSJ Op-ed describing them as the next Fannie Mae, particularly with respect to their recent ascendancy as sump-pump-prime lender of last resort. Not sure how their programs mesh or overlap with the FHAs’.
“In two years, FHA will be at the top of the list with the highest percentage of foreclosures.”
Isn’t the FHA the jumbo lender of last resort these days?
“Isn’t the FHA the jumbo lender of last resort these days?”
Oh, no, the FHA is all about promoting affordable housing — for instance, starter homes, homes for non-CEO type folks who cannot afford $1m+ spreads, etc. That’s why they set the cap on FHA loans at the affordable level of $729,250 — to make sure that expensive homes in coastal bubble zones cannot be financed with taxpayer-guaranteed FHA loans. Because it would be wrong to expect Midwestern taxpayers to help prop up the value of $1m+ homes for wealthy people who like to live near the coasts.
The US Government needs to get the hell out of the housing business, and especially the “housing affordability business” now and forever… “affordable housing”.. The FHA, Fannie, Freddie, Bernanke, the Fed and Congress wouldn’t know what that terms means if you stuck it down their throat… I’m trying to think of a single government action in this whole damn thing that has helped make housing more affordable… none.. nadda… just the opposite..
It’s all a ruse to the uneducated and lazy public to look like big brother is there to help… baloney.. let the market forces drive prices to where they would be absent all these failed programs and organizations and policies.. are we to believe that raising the FHA limit to $729K made housing more affordable… yea, righto… good one Congress…
I said it back then and I’ll say it again, Congress went the wrong way with those FHA limits .. instead of increasing them and exposing the taxpayers and public to more risk and higher housing prices, they should have lowered FHA loan caps…. lower them to $350K (or get out of the business all together) and let CA and the other bubble areas live with that…
Affordable housing my A___…
Wow, a post by the Miser and NYCBoy both at the same time. It’s a bonanza.
“The worst of the fearmongers–once deemed irresponsible and panicked by much of the markets–have been proved to have not been fearful enough.”
Only the MSM-cited ‘expert’ economists seem perpetually fooled by ‘worse than expected’ statistical releases. So far, almost all the official statistical releases I have seen since the onset of the financial panic have been just about as bad as predicted by many long time posters on this blog well in advance (hopefully Ben has salted away the archives somewhere to prove me right on this
). The only thing that has surprised me is that things actually did turn out about as badly as we predicted. At any rate, there is little reason to panic if your expectations are rational.
“Only the MSM-cited ‘expert’ economists seem perpetually fooled by ‘worse than expected’ statistical releases.”
I think that these economists know better. I’m beginning to believe that the “team player” syndrome that Tom Ridge spoke of in his new book “rules” everybody out there drawing a leadership salary.
Heh! If they think “the worst of the fearmongers… have been proved to have not been fearful enough”, then they don’t know many good fearmongers. We’re not eating each other and buying estates for a single gold coin…yet?
well, aladinsane disappeared…
“‘Given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited,’ Bernanke said.”
How’d that prediction turn out?
I vaguely recall Bernanke saying later in 2007 that subprime would be ‘contained’ to $200 bn.
How’d that prediction turn out?
Now we are told from the lofty heights of the Teton Summit that the economy has bottomed out. And there was also this humorous reference in the news to Bernanke’s budding interest in astrology.
But never mind all those failed predictions — he gets a pass on remaining steadfastly stopped-clock optimistic, because the truth is just too painful for Americans to handle.
The fact that Bernake still refers to this as a “sub-prime” problem shows how out of touch the Fed Board really is. Perhaps they should talk to Timmy about it.
That’s because, seriously, Bernanke just doesn’t have the perspective that a Fed Chairman should have.. certainly, Greenspan was totally clueless… they think everyone looks at $1.5M apartments as a standard place to live at a reasonable price… they are really clueless on the average income statements, balance sheets and cash flow statements of the average American.. I believe that sincerely, by the way… it’s beyond them..
Does anyone know how these percentages compare to previous recessions? Hard numbers! From what I saw during the bubble, I’m not surprised by this, but I don’t have anything to compare against.
Hi lep:
I don’t think it would be meaningful to discuss the percentage of prime/subprime mortgages during previous recessions because those recessions weren’t fueled by the mortgages, and this one is. It might be interesting to compare the subprime/prime ratio of today with the equivalent during the Great Depression, though. But even that would be a little off because mortgages weren’t really the thing that kicked it off back then either.
Sorry, I was very lazy in typing that out. I wanted to ask how the percentage of prime mortgages only being in trouble compares with previous times. Is 9% unprecedented? It sounds like quite a bit to me. Good point though, and I do realize it still applies somewhat to this question.
I’ve been looking at homes here in S. Florida for a few months now. What I see that are priced in my range (200k-210k) are really junk, usually in so-so neighbourhoods. The market is made of up (1) short sales (2) REO and (3) the odd person selling their home. The short sales have all been in terrible condition. The owners took entire sinks and cabinets, usually the appliances and such weird things as toilet seats (not the commode, just the seat). Pools are green with wildlife living inside and the structure is wrecked with neglect. Ceiling falling in, mold etc. The REO’s are usually somewhat better but they go fast. And the owner selling properties are still very, very high. These short sales will go to foreclosure, because most have sat there and have lots of problems but I did see some go to contingency. I don’t know what the new owners expect to do with them, as you are looking at 50k worth of repairs, at least. I also get a sense of a frenzy, reminiscent of the bubble mania as well. Like a sense of urgency to “snap up” these “great deals”. Even with a FHA rehab loan, you are still signing up for a big obligation. And we are at 10.2% unemployment down here, so I don’t know how buyers expect to sustain this. A search on the county courthouse site shows >4000 lis pendens or foreclosure judgements in the system. There are many more homes out there that are bank owned not yet on the MLS. So I agree with the broker in the previous post about an artificial sellers market. And one good hurricane or two and that will definitely throw the homeowner’s insurance situation over the cliff. As for me, I think it prudent to let this work itself out some more. This seems to be a dead cat bounce right now, at least down here.
Interesting that short sales are in worse shape than REOs, but that has been my impression in SW Florida condos as well. Seems like most of the short-sellers are “investors” with many long empty residences to unload while their lenders have been very slow to pull the plug. But prices are still way above rents so the market has a long way to go. Anybody who thinks they will ever cover their costs on these had better find a much sharper pencil.
I’ll chime in here with a brief anecdote.
i went sailing yesterday with owner of the waterfront home where i keep my sailboat near St. Petersburg, florida. during the trip i was surprised to learn that the house may be going into foreclosure anytime and i would probably need to find a new place for my boat.
the circumstances are complex, as this person recently lost their mate, and their job, so it’s not just a simple case of over-extension.
However, the couple did “re-fi” during the boom to invest in other properties. the residence is underwater so to speak, regardless of the circumstances, and paying on the debt looks foolish. the best solution is to live there until the bank moves them out.
the house has been theirs for more than 20 years, so it’s not like they could not have managed to keep the residence had the “re-fi” scenario not been used.
this person has a friend nearby who has been living under a looming foreclosure for nearly 2 years, making NO mortgage payments. so we can see the banks are in no hurry to lay claim to a depleted asset. i have heard of similar stories for expensive beachfront properties in the vicinity.
But, whenever the house is lost (or pending loss)…maintenance and upkeep become very low priorities. The upkeep and maintenance and taxes came up in conversation as another reason to leave this property in favor of a much smaller, less expensive and less burdened residence.
It will probably be another year before the place gets apprehended by the bank and sold off. At least, I am hopeful, as i need to find a new docking facility nearby, but i expect any repairs that are needed will be put put off for the new owners, in favor of keeping more money on hand for personal expenses.
Multiply this scenario by several hundred thousand people here in Florida and you get an idea of why properties are looking more dismal.
FL Renter-
Do you have a sense about the timing of the bottoming of the single family residential market for your neck of the woods?
The picture you’re reporting is not a pretty one.
Ol Bubba
I think it’ll be late next year. There is a lot of distressed property out there, and even more people living on the edge. We live like it is Beverley Hills down here but it really, really isn’t. You can only keep up an illusion of wealth for so long.
Another murder-suicide linked to foreclosure.
http://www.wtopnews.com/?nid=25&sid=1746032
I don’t think any of us would really blame these events on anyone other than those who do the killing.. but I’d be curious to know the body count indirectly due to the housing bubble.
Foreclosure! A fate worse than death!
After its all over, someone might then compare bubble suicide/murder rates to those of more normal periods and get a clue.
Does a person have to be somewhat… unstable to begin with before one of life’s little disasters pushes them over the edge?
Wealthy, employed people are in no way immune to suicide, nor are the poor more prone to suicide than others, afaik.
It may be that suicide rates will prove to have remained steady.
I’d Google “suicidal tenancies” and see what the intelligentsia has to say about it if i had absolutely nothing better to do.
“I’d Google ’suicidal tenancies’…”
Ha! I reward your worthy pun with upside down californians-
http://www.youtube.com/watch?v=UuOmsGXznHU
warning–non-informative link–
All I wanted was a Pepsi…..
They gave me a housing bubble instead.
I disagree. I think Alan Greenspan could be considered an accessory.
He didn’t supply the lithium our manic-depressive economy requires.
Yes, we are all responsible for our own actions, but, regardless stories like this are very sad for the family, kids, everyone involved or associated.. really too bad..
Of the many, many damaging things perpetrated on the American public over the course of our history of a nation, I rank this housing bubble up there with the worst of the worst.. that’s right, I do.. it remains the greatest public ponzi scheme of all time (probably never to be outdone again in our history)… the greatest transfer of wealth as well… perpetrated by the king thugs of wall street and their minions in mortgage broker and realtor offices across the country..
as much fake wealth (and glee) as this bubble created during it’s heyday, it has since created 10-fold hell in repercussions since … that includes the stress, depression, suicide, ruined family finances, destroyed family plans and warped work ethic and education values of many many thousands of Americans… then there are the indirect costs and problems of living in a society that has grown much too expensive for the wages.. if you don’t know what those things are, well, I’d say you just havn’t thought about it enough yet..
Anyhow, that’s why I will never be satisfied in seeing enough of these twerps, frausters, hypocrits and thiefs get thier just due…
“Two separate lawsuits have also been filed against Marsh in Hamilton County courts. In all, Bank of America, JPMorgan Chase and Fifth Third Bank want to recover $3.3 million Marsh borrowed for a mortgage and two other loans that offered his Fishers home as collateral.
“The house is currently listed for sale at $2.2 million. When originally put on the market in 2007, the home was listed for nearly $4 million.”
Marsh is just like any other two-bit FB except for the amounts involved. He puts it on the market ($4M) for more than was owed ($3.3M) because he apparently felt he was entitled to a certain amount of profit, then has been chasing the market down to well below ($2.2M so far) what was owed ($3.3M). Is there some way both Marsh and the lenders can lose big instead of U.S. taxpayers?
GREEN SHOOTS GREEN SHOOTS GREEN SHOOTS…
Hamptons rallying, agents say
Sunday, August 23, 2009
EAST HAMPTON, N.Y. — Few real estate markets got hit harder by the recession than the Hamptons, Long Island’s summer playground for the rich and famous.
After all, the people who live in East Hampton estates and Southampton mansions had been the prime beneficiaries of robust Wall Street profits.
“I told my wife to check and see if the phones were still working last winter,” joked Alan Schnurman, a high-end real estate developer. “Everything just stopped. There were no inquiries, no bids.”
But starting in the spring and accelerating throughout the summer, the real estate market on eastern Long Island has seen a solid rally. Third-quarter sales could triple from six months ago, though prices are down from their peak.
“These buyers are smart people and they all made a decision that the market hit a point and was forming a bottom,” Schnurman said. “Now, they want to get in on the values that are out there.”
Schnurman recently had five parties bidding on a 2.3-acre lot at his development called Sagaponack Greens, a former potato field only a few hundred yards from the ocean. After a two-week battle, the winning bidder plunked down $5 million for the land; millions more will be needed to actually build a house.
“Now the phone hasn’t stopped ringing,” Schnurman said.
Ann Rasmussen, an agent in Devlin McNiff’s East Hampton office, said she believes the resurgence happened because the stock market has improved.
“So many people have cash that they took out of the stock market and want to put it into property, an investment that they can use and enjoy,” she said.
Since Memorial Day, a 1903 East Hampton estate once owned by actress Elizabeth Montgomery was on the market for only two weeks before a $22.5 million offer was accepted. On the other end of the spectrum, a one-bedroom co-op in Amagansett sold for $255,000, Rasmussen said.
Bridgehampton agent Andrew Saunders noted there were only 104 first-quarter real estate transactions for the territory from Southampton to Montauk. That picked up to 142 in the second quarter. From June 19 to Aug. 19, there were 236 homes that either closed or were in contract.
Saunders predicts that by the end of the third quarter on Sept. 30, there could be 350 deals from Southampton to Montauk. That would nearly equal the number of sales for the entire tip of Long Island — a larger region that includes both the Hamptons and the island’s north fork — in the third quarter of last year, according to a survey released by Prudential Douglas Elliman Real Estate.
Sellers have had to lower prices to accommodate cautious buyers, Saunders conceded. In the Hamptons, that means cutting the asking price from, say, $10 million to $7.5 million or $8 million.
“It’s not like 2005 or 2006 when houses were selling in spite of themselves,” Saunders said. “But if a broker is creative and skillful, there is a real willingness by buyers to step up and make a deal.”
Gary DePersia, senior vice president of the Corcoran Group, said this is more than just overly enthusiastic sales chatter. The market still favors buyers, because there is a high inventory of homes for sale and mortgage rates are low, he said.
“We’re seeing people, I think, realizing they don’t know where the bottom of the market is, but thinking maybe now is the time to step in,” he said. “I know there are still experts out there saying things are going to get much worse. But this has been one of the busiest times in the Hamptons. Interest is at a fever pitch.”
Jonathon Miller, a real estate appraiser and consultant, attributes some of the sales boost to the long slump that preceded it. “A large part is a release of pent-up demand,” he said. “We’re sort of playing catch-up.”
He also differed with those who suggested the real estate market had hit its bottom.
“It’s pretty hard to call a bottom when the economy hasn’t stabilized,” he said. “In many ways New York was the last into the recession and likely will be the last out,” adding the recent rally “has to be taken with a grain of salt.”
Still, Schnurman and others think the worst might be over.
“There’s no question there’s renewed confidence in the market,” he said. “The best locations always come back first.”
The Hamptons still have a way to go. NY is simply lagging many other places, in my opinion.
“There’s no question there’s renewed confidence in the market”
I think capital preservation is what’s driving this uptick in luxury Hamptons RE sales. Too much cash on their hands.
It’s different this time.My agent told me real estate was a sure thing.
“It’s different this time.”
No need for sarcasm. We’re talking well heeled Wall Streeters, not your average Joe 6 pack, and their favorite playground. I would love to see Hamptons crush and burn, but meanwhile why don’t we try to analyze and interpret what’s actually happening?
Wall Street was on a tear this past year, profits are high, expected bonuses (in whatever form) are high, layoffs have stopped for the time being, even job market is picking up. (Now, I personally do not believe the “good times” courtesy of American taxpayer will continue, but that’s beside the point.)
If you still have a job, you’re sitting pretty. If you’re on the top rung of the ladder, you’re golden. And everyone and their mother are talking about eventual inflation.
These people are rich, with plenty of cash on their hands. As Wall Street goes, so Hamptons go. Hamptons is a barometer of Wall Street.
Is your Suburb the next Slum?
http://realestate.msn.com/article.aspx?cp-documentid=21179977>1=35000
When well-paying jobs disappear, there’s nowhere to run. Inner city, suburbs - all become slums. A scary thought is, could Michigan be a proxy for future America? Unless new jobs are created, there’ll be more and more slums in our future. It’s not just demographics as the article suggests.
The article suggests inner cities will be gentrified, while suburbs are rapidly becoming slums. I’ll repost this on today’s bits bucket, as it was not up when I got up for my early morning two mile swim!
I think gentrification of inner cities depends on the jobs.
In NYC, coop owners and market rent tenants are carying on their backs a huge mass of rent control and rent stabilized tenants, not to mention welfare recipients.
As long as the jobs are plenty, you can pay both your share and the share of that other guy next door… When the jobs disappear and the ranks of those needing public assistance swell, a city can reach a breaking point, and the flight back to whatever “safer” (and less taxed) neighborhood will start afresh.
“Not all of these homes will sit vacant, Nelson says. Many of them will be divided up into multifamily rental properties.” “You will have two or three households living in these large mansions in the suburbs,” Nelson says, adding that this will bring property values down and put extra strain on public services.
“Many of the houses still sit empty, or have been rented out as Section 8 housing. Many of the lawns are brown and weedy. Graffiti are starting to crop up on walls and signs throughout the area. Sheets, not curtains, are tacked up in some windows.”
The false prosperity of enamel green shoots…
“More alarming, property crimes in Elk Grove, such as burglary, larceny and motor vehicle theft — soared tenfold in the first six months of this year from the same period in 2007. Violent crime is on the rise, too, jumping 18% in that same period, according to reports by the Elk Grove Police Department.”
Suburban living at its finest.
LOL. I live in downtown Sacramento and was bashing Elk Grove a few weeks back for having terrible schools and being a suburban wasteland full of transplanted SF Bay Area gangbangers.
Another poster “schooled” me, so to speak, stating that Elk Grove, CA is where people want to live, it’s close to his/her work, schools are great…blah, blah, blah. Wonder who that was?
South Sacramento is a slum belt that sits between Elk Grove and Central Sacramento. You don’t want to live in So. Sac any more than you want to love in South Central L.A. Wait until it starts to creep into EG.
Postcards From the Hamptons 2009
August 21, 2009, 1:00 pm
It’s a summer Friday, which means lots of Wall Streeters are making their getaways to the Hamptons in Long Island, N.Y. It’s long been the unofficial playground for the finance crowd, but in recent years, there’s been a bit more anxiety amid the manicured hedges and expensive boutiques.
In 2007, collapsing megabuyouts and imploding Bear Stearns funds sometimes made it hard to finish 18 holes at the Maidstone Club. In the summer of 2008, the struggles at Lehman Brothers cast a big cloud over the season.
Then Wall Street fell to pieces, all but assuring that summer 2009 would be a downer.
As early as April, some were already calling the Hamptons rental market the weakest they had ever seen.
But make no mistake: Even in a weak market, some Hamptons rental properties can still eat up a considerable part of a banker’s bonus.
Walter Noel, whose investment firm the Fairfield Greenwich Group lost more than $7 billion of clients’ money in the Bernard L. Madoff scheme, was reportedly seeking $350,000 to rent his family’s Southampton house for the month of July, and $375,000 for August.
While there is nothing subprime about the Hamptons, home sales there haven’t been immune from the downturn, either.
Recent data from Prudential Douglas Elliman found that second-quarter home sales there slumped more than 43 percent from the same period in 2008.
Even John Paulson, whose hedge fund made billions by betting against subprime mortgages, felt the real estate pinch. His Southampton “cottage” — which measures in at about 7,000 square feet — was sold this summer for just shy of $10 million after what the Curbed blog described as a “price chop for the ages.” It first went on the market in April 2008 with an asking price of $19.5 million.
The two East Quogue homes owned by Marc Dreier, the highflying lawyer who pleaded guilty to defrauding hedge funds and other investors, didn’t fare so well, either. After being seized by prosecutors, the Dune Road properties were sold at auction in June for about $10.4 million, somewhat less than the early estimate of $12.5 million.
Restaurant workers have also been grousing about a lackluster season, according to a recent article in The East Hampton Star.
At Nick and Toni’s, the East Hampton eatery where Ronald Perelman might be found dining one night and Brad Pitt the next, this year’s mood has been a bit more restrained, judging from what Christie Cober, the restaurant’s general manager, told the newspaper.
“I think we’re probably not seeing as much money being spent on really, really expensive wine,” she said, “but people are still buying wine.”
http://dealbook.blogs.nytimes.com/2009/08/21/postcards-from-the-hamptons-2009/