LuxuryBlurb

Goldman Sachs, whose shares doubled last year as profit soared to an all-time high, awarded Blankfein a $9 million all-stock bonus for 2009, according to a Feb. 5 filing with the U.S. Securities and Exchange Commission. Blankfein’s payment of 58,381 restricted stock units, valued at $9 million at the Feb. 5 closing price of $154.16, falls short of the Wall Street record $67.9 million Blankfein got in 2007. With the top executive in Wall Street earning significantly smaller bonuses, we should expect tax income to the State to drop dramatically. So all the teachers, firemen, cops, government workers, etc who cried foul at the huge banker bonuses seemed to forget one small detail:  When bonuses are slashed, State income is slashed as these bonuses are heavily taxed….and then jobs are slashed. We aren’t saying that excessive bonuses are a good thing, but it seems sharply reduced bonuses are a lot worse for a lot more people who cannot afford to lose their jobs…..  is the entire tax system corrupted? Lets face it: if the population quit smoking as everyone says you should, there would be a significant drop in tax revenues too….

How does this affect the luxury real estate market? We think it is doubtful that Mr. Blankfein was awaiting his bonus to buy a new home….

Pending sales of previously owned homes edged up as expected in December, a survey showed on Tuesday: Will this help to calm fears of renewed weakness in the troubled housing sector? The National Association of Realtors’ index of pending home sales rose 1% in December after tumbling 16.4% in November. Economists had expected sales to be unchanged. The NAR’s index was 10.9% higher than in December 2008. We think these figures are only meaningful once they repeat themselves in a trend for at least 3-6 months. And these figures are really not a reflection of the luxury market….or are they? And why are these figures released a whole month after the fact?

The month of January 2010 was a busy real estate month indeed: Brokers babbled about how this weekend’s Open Houses felt more like 2007/2008. How sustainable is this when The White House just announced raised budgets and taxes? Only time will tell. Manhattanites are often similar to Igor in ‘Young Frankenstein’….the world may see the hunchback, but not Igor: we aclimatize so quickly we barely acknowledge the change or pain. Think 9/11….think all those cabfare raises….think Lehman….maybe we are stronger than all the challenges we face or maybe we just get on with it? Read this month’s LUXURYLETTER to find out more.  www.luxuryletter.com