The Coming Media Shift

One year after the collapse of Wall Street signaled the start of the Great Recession, another struggling industry is moving fast to change. And by change I mean charge. There’s been a seismic shift in online journalism, from a philosophy of free content to one where everything may soon disappear behind pay walls.

Say goodbye to the era of the Free Internet. The New York Times recently wrote how Steven Brill and Journalism Online.com, once the lone venture seeking to build a paid online model for newspapers and magazines, suddenly has competition.

Times reporter Richard Perez-Pena said media mogul Rupert Murdoch, and tech giants Google, Microsoft and IBM have each announced plans to develop pay systems for media companies. Murdoch owns the Wall Street Journal, the one major paper which already successfully charges for online content.

Read the Times story here: http://bit.ly/4aHUwb

What’s interesting about the looming shift in online journalism is how the media itself has resisted. From reporters and editors to industry insiders and executives, the cry has been that a pay model would never work.

Many news organizations tried to charge – unsuccessfully — for content at the dawn of the Internet in the mid 1990s. Back then, customers revolted because newspaper penetration was high in most communities and the online content was little more than a less-glitzy version of the print edition.

Not today. There’s far more content online, including multimedia offerings such as video and photo galleries, than in the daily paper. And with the advent of Open ID-style systems, a pay model to view content from multiple news sources is possible – and inevitable.

The traction for this move has come in the last year. The latest economic crisis forced many businesses to rethink how they operate. An advertising crunch has online media considering a fundamental shift. And it’s coming fast.

On Long Island, Newsday has a unique path toward this. Cablevision bought the paper last summer and has moved quickly to use the content as a selling point to fend off hard-charging Verizon. So what does it mean locally? If you already subscribe to Newsday or Cablevision — nothing. But if not, get ready to lose access to Newsday.

Also, Cablevision, in partnership with Newsday, is launching MSG Varsity, a high school sports channel. It’s the first such network in the nation. And once again, it’s content that’s available only through Cablevision. Expect more innovation to come in the next few years.

Blog originally posted at LI Entrepreneurs.com

LI Pulse: Stony Brook Football

Title: Run Hard, Sell Hard: Stony Brook football hopes to win games and fans behind a pair of dynamic runners
Publication: Long Island Pulse magazine
Author: Jason Molinet
Date: September 2009
Start Page: 51
Word Count: 1038

Conte Cuttino and Ed Gowins cut intimidating figures without ever strapping on a pair of shoulder pads. The running backs possess a stat sheet that should be the talk of the nation. Their presence in the same backfield is something to behold.

There is nothing subtle about Gowins, from the tattoos landscaping his massive arms to the oversized diamond earring, emitting a sparkle as blinding as any sunset. Just imagine how the former Bellport High School star plays. It’s in-your-face power running for four quarters.

“They feel [me],’’ said Gowins, who was named National Freshman of the Year by College Sporting News. “That’s one of the things I like to do. When I see someone in front of me, I run them over. The second time they’ll think twice about trying to tackle me.”

So why is this dynamic duo getting so little attention? The truth is the foundation of Stony Brook University football might as well have been built on swampland. Sales jobs don’t get much harder.

College football may reign supreme in Los Angeles and Omaha—and every burg south of the Mason Dixon. But in the tri-state area, and Long Island in particular, the sport garners about as much respect as soap box racing.

And that’s understandable. Stony Brook finished 2008 with a losing record. The Seawolves have never won a postseason game in 25 years of existence. They have never even beaten big brother Hofstra, another small fish in the sea that is New York sports.

It’s all part of a muddied past, one whose narrative arc has been on a steady ascent.

The expectations are starting to simmer. For the first time, Stony Brook is a fully-funded, 63-scholarship program—on par with the rest of the Football Championship Subdivision (the oversized and overly confusing name of what was formerly known as NCAA Division I-AA football).

Stony Brook enters its second year in the competitive Big South Conference. And with the most dangerous running back tandem in college football, the program has created some insider buzz. With Cuttino and Gowins plowing through opposing defenses this fall, Stony Brook could be on the verge of a breakthrough season.

“I just let them play,’’ third-year coach Chuck Priore said. “I tell them all the time, ‘Just go play. If you both do your role as football players, then good things will happen to you.’ They are both talented enough.”

The team started 2008 off 1-5 and scored all of 10 points over three consecutive games, the last a 33-0 domination by nationally-ranked Liberty. Then Priore unleashed Cuttino and Gowins in the second half of last season with record-breaking results.

It turned on October 19, a 20-19 home win over Charleston Southern. Cuttino racked up his biggest performance to date with 107 rushing yards and redshirt freshman quarterback Dayne Hoffman tossed a 23-yard touchdown pass with 1:06 left. Gowins broke big runs on the winning drive.

“It probably took a little time to get things going,’’ said Cuttino, a senior from Uniondale. “Eddie and I were able to get things done at the end in a big way.”

Stony Brook won four of its final five games to finish in a second-place tie in the Big South Conference. And the Seawolves transformed from a sputtering offense to an unstoppable ground attack.

“Once we were able to settle in on a plan and mature as an offense, Conte and Eddie’s performances helped catapult us to success,’’ Priore said. “We were able to put things together, and those two kids the second half of the year were very impressive.’’

On November 9, the Seawolves cranked out 635 yards on the ground in a steady downpour to pound host Iona, 68-9. Gowins ran for 278 yards and three touchdowns while Cuttino had 205 yards and three scores. The Football Championship Subdivision team record for rushing yards in a game is 681 by Missouri State in 1988.

It was a banner day for Stony Brook. Coincidental or not, Iona announced 12 days later it was dropping its 42-year-old football program altogether.

The Seawolves closed the season one week later with another rout, a 40-26 win over Virginia Military Institute. Stony Brook totalled 622 yards of offense, paced by Gowins (250 yards and three touchdowns) and Cuttino (234 yards).

Gowins amassed 713 yards and eight touchdowns over the final three games, an avalanche of offense. His 1,310 yards set the school’s single-season rushing record and earned Gowins national recognition. Cuttino, who became Stony Brook’s all-time rushing leader with 2,807 career yards, finished fourth in the conference in rushing (1,243 yards) and was named an All-Big South second-teamer.

“We complement each other in a big way,’’ the shifty Cuttino said. “Eddie has bulk but is deceiving because he has speed. As far as teams trying to game plan against us—it’s hard. We can do many of the same things. He has a bigger body, a bigger frame. But it doesn’t matter who is in the backfield. Coach doesn’t have a problem with Eddie going outside or with me running inside.”

Gowins spent a year in prep school before returning home to play at Stony Brook. His first collegiate carry went for a 22-yard touchdown. Paired with the equally electric Cuttino, who knows what the two can accomplish with another year of experience.

Priore must replace both receivers and two linemen. And Hoffman suffered through growing pains at quarterback a year ago. The Seawolves (5-6 overall, 3-2 Big South) are picked to finish second behind two-time champ Liberty in the Big South.

But the schedule is unforgiving, with September games against defending Patriot League champ Colgate and Ivy League winner Brown. The Seawolves open the season September 5 at Hofstra. Even though Stony Brook is 0-12 lifetime against its cross-Island rival, at least the game is local. Seven of the team’s first ten games are on the road.

“Execute our game plan and we have the potential to win the conference,’’ Cuttino said. “We need to stay focused and do our job.”

Stony Brook football is a tough sell. But Cuttino and Gowins offer a persuasive argument. Getting the players to believe is an important first step on the road to better days.

LI Pulse: Fishing Montauk

 

Title: Fishing Mecca; World-class fishing awaits in Montauk
Publication: Long Island Pulse magazine
Author: Jason Molinet
Date: August 2009
Start Page: 52
Word Count: 992

A murky shadow at first, Kevin Faulkner’s eyes grew the size of dinner plates as the creature materialized into view. The mere sight of a great white shark inspires fear and awe and is equal to its myth. A monster seemingly as big as the 26-foot boat circled just beneath the surface in the waters off Block Island.

Just as quickly, it was gone.

“It was a surreal experience,’’ Faulkner said. “There was a lot of jumping around by me. Definitely the biggest thing I’ve seen in the water. I’m not scared of the water. But if this thing swam up to you, you’d die of fright.’’

While Faulkner didn’t hook the legendary shark, its mere presence is why Montauk is known as a world-class fishing destination. And it’s why Faulkner sits in traffic nearly four hours simply to experience the magic that is Montauk.

The 38-year-old contractor from the Poughkeepsie suburb of Dover Plains could sail out of any harbor along the Hudson River or Long Island Sound. Yet he suffers the stop-and-go trek through the Bronx, over the Throgs Neck Bridge, along the Long Island Expressway to the traffic-choked villages of the South Fork. The view along the way melds from concrete jungle into Pine Barrens, and finally rolling hills and beach dunes known sparely as The End.

The rich and famous transformed Southampton and East Hampton into destinations for the jet set. Montauk is less pretentious than its neighbors to the west, a laid back beach resort at its core. Surfers and families flock to the white sand and roiling surf. But it has long been known as a fishing Mecca, luring hardcore anglers such as Faulkner.

“I’d drive eight hours to get there,’’ Faulkner said. “Montauk is a very unique place. I’ve fished a lot of places with a lot of people. It’s pretty much unanimous. There’s nothing like Montauk. We’re just lucky it’s here.”

The waters surrounding Montauk yield spectacular fishing year round and offer something for everyone. There’s Zen-like surfcasting along the rocky shoreline guarded by the Montauk Point Lighthouse. Charter a boat to hunt sharks in the open ocean. Or come as you are and hop on a party boat for six hours of guilt-free fishing in the rips (turbulent currents) just offshore.

While it’s not equal to Key West or Oahu or San Diego in its diversity, migrating fish populations make Montauk a veritable feast of fluke, flounder, striped bass, sea bass, bluefish, tuna and yes, sharks of every stripe.

Frank Mundus put the East End village on the sport fishing short list for adventurers in 1951 when he harpooned a reported 16-foot, 4,500-pound great white. It was a feat that inspired the character Quint in the novel and film Jaws, which spawned a cultural phenomenon.

But great white sharks are the white whale of Montauk fishing, more salty story than everyday occurrence. Still, the legend is grounded in fact. The 17th annual Mako/Thresher Mania Tournament, which begins August 6, highlights Montauk’s connection to monster fishing.

“I think it’s reputation for shark is well deserved,’’ said Lee Ellis, 39, who lives and works in East Hampton when he’s not out on his boat “T-Bone” off Montauk. “There’s been a lot of shark hunted out of there. It’s a great place for a person to go out and get the biggest fish of their lives. Shark fishing is a great adrenaline sport.’’

Yet the region’s real rep is built on an army of weekend anglers intent on landing plentiful—and feisty— striped bass and blues.

“During the summer time, we get a lot of tourists in Montauk,’’ Capt. Carl Fosberg said before taking out the “Viking Starship” for a summer night fishing trip in search of bluefish and striped bass. “There are a lot of first-timers. It’s family-friendly and fun fishing. We supply them with everything they need. We make sure they enjoy themselves. It’s about getting the kids fishing.’’

A memory that sticks in his mind is the frigid conditions of a March fishing trip 60 miles offshore. A 9-year-old boy was one of the few anglers undeterred by the weather.

“It was really cold. The kid was die-hard,’’ Fosberg recalled. “He would not leave the rail. He was fishing the whole time. And he ended up catching the biggest fish on the boat.’’

A 25-pound tilefish was the prize that day.

“When you see a kid smile—so proud of himself—it’s a nice moment because you know that kid’s going to be hooked into fishing for the rest of his life,’’ Fosberg added.

It begins at one of the marinas dotting Lake Montauk, which spills almost directly into the Atlantic. Most boaters make a beeline east of the lighthouse, setting up between the mainland and Block Island.

Try night fishing from August into September. The Viking Fleet (vikingfleet.com), which features an $85 trip from 7pm to 1am, is the best bet. Bring a sweater because it can get cool. Sunsets are intense and there’s nothing like a full moon on the water. It will be an unforgettable experience either way.

“That’s what makes fishing so great,’’ Ellis said. “It is something different for everybody.”

Guide Bill Wetzel, a veteran surfcaster, said the fishing is the best he’s seen in the last decade. The ample rain and east winds have been a surf fisherman’s dream. And with 50 miles of sandy beach and rocky shoreline to roam, getting a line in the water is simple.

“Anybody can get started,” said Wetzel, who likes August best. “All you need is a rod and waders.”

There aren’t as many boats on the water this summer. One of the unexpected bonuses of a sour economy, say regulars. It’s also been great fishing so far. If you can stomach the slow crawl along Route 27, The End will reward your patience. From land or sea, Montauk offers world-class fun for every angler. And that’s no fish tale.

Happy Anniversary LI Entrepreneurs.com

LI Entrepreneurs.com launched one year ago today. The site had no ambition other than to provide a virtual hub to network and exchange ideas. We’re now 100 members and growing.

It’s been a year of tremendous economic challenges across the globe and here on Long Island, perhaps the most demanding environment in decades. And yet we persist, and continue to chase our dreams fuelled by entrepreneurial spirit – and lots of caffeine.

So let’s celebrate our brotherhood. Because if there is someone who knows what challenges you confront on a daily basis, it’s the good people of LI Entrepreneurs.com. Local business owners empowering each other is the essence of this group. As we kick off a new year on this social network, please contribute to the conversation and bring newcomers into the fold.

+ Talk shop with a colleague? Ask that person to join.

+ Is there a debate or issue out there you have an interest in? Post a blog and get the conversation going online.

+ Know of an event that might be helpful? Add it to the calendar.

LI Entrepreneurs.com should be a resource. Use it and we’ll all prosper. Knowledge is power.

Blog originally posted at LI Entrepreneurs.com

LI Pulse: The Cheap Seats

Title: The Cheap Seats; Can’t afford tickets to see the Yankees or Mets? Try a minor league game instead
Publication: Long Island Pulse magazine
Author: Jason Molinet
Date: June 2009
Start Page: 48
Word Count: 1,167

So you couldn’t afford those $55,000 seats the New York Mets were offering up at newly minted Citi Field. Well, even Bernie Madoff had to eventually turn his—and himself—in. Speaking of rip-off artists, the $5 bottled water at the reincarnated Yankee Stadium ain’t much better.

And let’s not get into how much the Yankees ponied up for three free agents this offseason. For the record, slugger Mark Teixeira and pitchers C.C. Sabathia and A.J. Burnett netted a combined $420 million. Ka-ching!

Then there is the eww factor. A-Rod’s steroid scandal. Roger Clemens’ petulance in denying ever using performance enhancers. A-Rod’s messy divorce. The Mets refusing to drop the toxic naming rights deal with bailout boy Citigroup. A-Rod’s twisted fling with Madonna. We love to hate A-Rod. The list goes on.
Yet there is an alternative universe where the grass is just as green, the crowds manageable, prices downright cheap and the outrageous acts are choreographed. We’re talking minor league baseball, of course, where the boys of summer never grew up.

The Mets and Yankees ensured New York remained a minor league dead zone for decades. Then in 2000 came the independent Long Island Ducks of the Atlantic League, along with New York-Penn League franchises in Brooklyn and Staten Island. In fact, 18 minor league teams lie within a four-hour drive of Long Island.

Each has parks filled with character and teams populated by characters. Where else can you see rising stars and venerable veterans take hacks from just five rows away? Views of the Coney Island boardwalk and the New York City skyline—from Brooklyn and Staten Island, respectively—are breathtaking. And the promotions—from the sensible all-you-can-eat plan in Staten Island to regular fireworks displays courtesy of Grucci after Ducks games and the Lamaze-inducing “salute to pregnancy” night in Brooklyn—offer something for everyone.

The money you spend on gas will be more than offset by the price of admission. And the experience? Priceless. Road trip anyone? Start with these three local gems:

Long Island Ducks

Where: Citibank Park (seats 6,002) in Central Islip.
When: 70 home dates, April-September.
Cheapest Ticket: $10.
The Skinny: Baseball might lay claim as America’s pastime, but for cash-strapped Long Islanders, the Ducks offer an affordable alternative to the pinstriped barons in Flushing and the Bronx. Despite having appeared in just one championship series since the team’s inception in 2000, the Ducks have consistently been one of the top draws in the minors. Citibank Park may have an unfortunate name, but it’s easy accessibility and great sight lines make it family-friendly. For the more adventuresome, go see the Ducks in Bridgeport. The Port Jefferson Ferry docks next to the ballpark of the rival Bluefish. The caliber of play in the Atlantic League is generally considered somewhere between Double- and Triple-A. But you never know what will happen, such as the August 2007 day when former All-Star Jose Offerman charged the mound and attacked the pitcher with his bat. Offerman was banned from the league, but former Mets great with an occasional bloated ego Gary Carter has signed on as the new Ducks manager.
Player Watch: Follow Ducks outfielder Preston Wilson, 34, as he tries to work his way back to the bigs. The former Met farmhand and stepson of New York icon Mookie Wilson slammed 36 homers for the Colorado Rockies in 2003. MLB teams regularly dip into the Atlantic League talent pool to sign players with a hot hand, a fact Wilson is banking on.
Best Promo: Ehy! Italian heritage night celebrates the Island’s preeminent culture from a flag giveaway to food, music and more. June 13 vs. Newark Bears.

Brooklyn Cyclones

Where: KeySpan Park (seats 7,500) in Coney Island.
When: 38 home dates, June-September.
Cheapest Ticket: $8.
The Skinny: This short-season Class A affiliate of the Mets is where top draft picks usually get their first taste of pro ball. Connected to the boardwalk, and with the Wonder Wheel and the Coney Island seascape as the backdrop, this picturesque park has one of the best atmospheres anywhere. Start in the neighborhood. The oldest continually-operated aquarium in the United States is the nearby New York Aquarium. Get a hot dog at the original Nathan’s Famous a block away. Hit boardwalk staples such as the paintball-charged “Shoot the Freak.” Take a tour of the Brooklyn Baseball Gallery and Brooklyn Dodgers Hall of Fame housed at the park. Perhaps even spot a former Dodger great signing autographs. But the best part of the Cyclones experience is their free-spirited promos, from a Barack Obama bobblehead to a pot-luck “Garage Sale” giveaway. Oh, and there’s the beach. Whatever your excuse, the Cyclones are a must-stop on any minor league tour.
Best Promo: “A salute to pregnancy” featuring pre-game Lamaze in centerfield, a craving station of pickles and ice cream, and many other tie-ins. And if you agree to name your child Brooklyn or Cy, the team promises free tickets for life. July 19 vs. Auburn Doubledays.

Staten Island Yankees

Where: Richmond County Bank Ballpark (seats 7,171) in St. George.
When: 38 home dates, June-September.
Cheapest Ticket: $6.
The Skinny: The Yankees have won four New York-Penn League titles since relocating to Staten Island in 1999. The short-season Class A affiliate of the Yankees has cultivated a fierce rivalry with the Cyclones. Like Brooklyn, Staten Island is usually the first stop for touted Yankees prospects. Robinson Cano and Chen-Ming Wang are two current big leaguers who started off as Baby Bombers. Take the scenic route to the game: The Staten Island Ferry terminal is next door. The dense neighborhood has also been designated a historic district. Season ticket holders get all-you-can-eat concessions, and by season’s end begin resembling the mascot, Scooter the Holy Cow. Cross the Verrazano at your own risk, but the park is worth a visit.
Best Promo: The Yankees put on a fireworks display after each game. And with the Statue of Liberty in the distance—who could ask for more? For an unforgettable seat to the Independence Day fireworks over New York Harbor, get tickets to the July 4 game against the Lowell Spinners.

Road Trip

Minor league baseball is thriving in the Northeast and within an easy drive of Long Island. Most are within three hours, including several Yankees and Mets affiliates. So hit the road and see tomorrow’s stars today. The list:

Triple A—International League

 

Team	Location	Affiliate
Pawtucket Red Sox	Pawtucket, RI	Boston
Scranton/Wilkes-Barre Yankees	Moosic, PA	Yankees
Lehigh Valley Ironpigs	Allentown, PA	Philadelphia
Syracuse Chiefs	Syracuse	Washington
Rochester Red Wings	Rochester	Minnesota
Buffalo Bisons	Buffalo	Mets

 

Double A—Eastern League

 

Team	Location	Affiliate
Binghamton Mets	Binghamton	Mets
Connecticut Defenders	Norwich, CT	San Francisco
New Britain Rock Cats	New Britain, CT	Minnesota
Trenton Thunder	Trenton, NJ	Yankees

 

Class A—South Atlantic League

 

Team	Location	Affiliate
Lakewood Blue Claws	Lakewood, N.J.	Philadelphia

 

SS Class A—New York-Penn League

 

Team	Location	Affiliate
Brooklyn Cyclones	Coney Island	Mets
Staten Island Yankees	St. George	Yankees
Oneonta Tigers	Oneonta	Detroit
Tri-City ValleyCats	Troy	Houston
Batavia Muckdogs	Batavia	St. Louis
Hudson Valley Renegades	Wappingers Falls	Tampa Bay

 

Independent—Atlantic League

 

Team	Location
Long Island Ducks	Central Islip
Bridgeport Bluefish	Bridgeport, CT
Newark Bears	Newark, NJ
Somerset Patriots	Bridgewater, NJ
Camden Riversharks	Camden, NJ

Community Shred Day

I might throw a ticker tape parade for whoever came up with the following novel idea. A Huntington business is offering to shred any of your documents for free next Saturday. I’ll be there with a few boxes. Check out the press release:

Raymond James Financial Services and Shred-it will be hosting a community “Shred Day” on Saturday, June 6, 2009, from 11 am – 3 pm (rain date: Sunday, June 7). Local residents and business owners are invited to get their home or business paperwork organized and help to prevent identity theft by bringing their obsolete documents to 75 New Street in Huntington Village where Shred-it will have their specially equipped truck on site to destroy documents free of charge.

Attendees are invited to watch as their documents are instantly destroyed by one of the giant Shred-It high speed cross cutting machines. Susan Pearlman and Greg Kennedy of Raymond James Financial Services will be available to offer tips and resources on how to guard against identity theft and to answer questions about financial planning. They will also provide information to determine how long to keep your personal and business records.

Identity theft is the fastest growing form of consumer fraud in North America. It is estimated that a victim of identity theft spends approximately 200-600 hours and up to $1,500 to restore their identities and credit histories. Shred-its trucks contain cutting-edge proprietary technology that can safely dispose of business or personal papers that are no longer needed. Other items that can be shredded include computer discs, credit and ATM cards.

Community Shred events increase the knowledge of identity theft, making our communities safer places to live. Shredding personal information is a key step that individuals can take to prevent becoming victims of identity theft. The destroyed documents, in the form of confetti-sized pieces, will be transferred to a recycling facility, where they return to the marketplace in the form of items such as recycled household paper products.

Blog originally posted at LI Entrepreneurs.com

Bad Timing For Local Business

So you think you had bad timing. Here is an example of a high-profile local business that’s been struck down by the Great Recession. The good news is the New York Dragons pro football team, and Arena Football in general, look to move forward in 2010.

Check out the story from Dave Caldwell in The New York Times:

“EYLAN HARDING, the coach of the New York Dragons football team, has a windowless office so deep inside Nassau Coliseum that visitors might need a global positioning system to find it. He likes it that way. He can watch game film and work on his laptop in relative peace.

The Dragons’ 16-game Arena Football League season would normally be in full swing, but the league’s board, citing debt and higher expenses, canceled the 2009 schedule in December. Still, Mr. Harding and the rest of the scaled-down Dragons staff are preparing to resume play eventually.”

Blog originally posted at LI Entrepreneurs.com

LI Pulse: Confessions of a Mortgage Predator

Title: Confessions of a Mortgage Predator; Selling greed and mortgages during the real estate boom
Publication: Long Island Pulse magazine
Author: Jason Molinet
Date: April 2009
Start Page: 62
Word Count: 1,642

“Hi, my name is Joey Walnut and I’m calling about your mortgage with Ameriquest,’’ proclaimed a young man into the phone receiver, hoping the voice on the other end would respond with curiosity and not rage.

In a white-washed office space in a non-descript strip plaza off a traffic-choked artery in Nassau County, Joey begins each cold call in similar fashion. A swig of Vodka-spiked Pepsi between prospects takes the edge off. He repeats the process more than 100 times each evening, following a list of random leads and reading off a tight script.

“It’s really not an easy job to call people at their house at night,’’ said Joey, a college grad. “It really isn’t. So a few drinks would loosen you up. And some people would do coke because it makes you go insane and you’d pound away at the phone.’’

Think Jim Cramer insane. And the goal was mad money.

The payoff comes six to eight weeks later when leads turn into closings and his company collects up to 10 percent of the loan when all the fees are tallied. That’s a $30,000 chunk of gold on a $300,000 mortgage. Everyone gets a piece of the pie, right on down to a cool $5,000 windfall for so-called loan officers like Joey.

These cocaine cold-callers were living the high life, indeed.

Joey — his name has been changed to protect his identity – worked at various mortgage brokerages for three years beginning in late 2004. And while his story may not reflect the industry as a whole, it is emblematic of a decade-long real estate boom that turned homes into ATM machines and saw greed swell to towering heights.

“I was amazed at how many people were involved in the loan and knew this wasn’t helping the situation for the person,’’ said Joey, who is still in sales but got out of real estate in 2007. “Bank reps. The bank taking on the loan. Brokers. Underwriters. Lawyers. The title company. There’s just a lot of people getting paid on each loan.’’

Buy a new car. Consolidate debt. Take an extravagant vacation. A lower monthly payment. There were a million reasons why homeowners looked to refinance. The nexus of rising home values, low interest rates and loose banking practices spawned the great mortgage grab. Long Island, home to mortgage heavyweight American Home Mortgage Investment Corp. and in the shadow of the world’s financial hub, proved to be fertile ground for brokers.

All of which made the subsequent housing collapse all the more spectacular. American Home, the region’s sixth-largest employer, imploded in August 2007. Mortgage companies were the first to suffer as home values leveled off and lending guidelines tightened. The misery spread quickly.

Twenty-five banks nationwide have been shut down by federal regulators and 2.22 million homes sank into foreclosure a year ago, according to Hope Now Alliance. The Standard & Poor’s/Case-Shiller U.S. national home price index recorded an 18 percent drop in home values in the fourth quarter of 2008.

While New York hasn’t been as hard-hit as Arizona, California or Florida, the sting can be felt on every corner of Long Island as the real estate bubble gave way to a wider recession. The housing market alone has amassed some grim statistics. Suffolk endured 5,855 foreclosures last year, according to RealtyTrac, the fourth-highest in the state. Nassau saw 4,099 foreclosures a year ago.     

“Banks and brokers created the problem. It’s not the borrower’s fault,’’ said Syosset-based attorney James G. Preston, who oversaw 30 closings a week at the peak in 2004. “They sucked these people in.

“If you look at the people selling this stuff they’re kids — young men and women just out of college. It’s like selling stock. They were motivated by money. They were quintessential sales men. Give them a product and let them go.’’

Looking back, the housing bubble was hard to miss. There were legitimate people such as Preston earning a living on the gold rush and prospectors such as Joey panning for riches with the backing of dubious operators.

Some mortgage brokers struck it rich. But especially banks, which played the ultimate game of zero accountability. They outsourced their sales force to mortgage brokerages and then spun off the loans to Wall Street as mortgage-backed securities, raking in a percentage off each transaction – all without consequence.

“One of the real problems is the disconnect between the person selling the loan and the people who owned the loan,’’ said Preston, whose business has gone from 90 percent real estate to just 10.

Banks needed to show sales growth. But when you’ve already leant to everyone with good credit, what do you do next? You create financial products for everyone else. The result fed the rise of mortgage brokers and forced anyone who owned a home to fend off nightly calls – and the temptation — to refinance.

Joey was lured to the mortgage game by the friend of a friend, who bragged of $250,000 paydays and backed it up by driving a red Ferrari.

He started as a cold caller and graduated to loan officer within three months. All while working in an office space straight from a Hollywood script — a large vacuum with folding tables, phones and chairs and little else. This is the pit where newbies as young as 18 earned their stripes as cold callers who made more than 100 phone calls a night looking for leads. At least 97 percent of those never amounted to anything more than voice mail or irate hang-ups.

“Some people drank and some people did drugs,’’ Joey said. “It was out in the open.  It was like nothing. My boss said, ‘If you have to do coke to make money, then do coke.’ That was the mindset.’’

The point was to relentlessly pursue the next lead. The cubicles off to the sides were staffed by loan officers, who armed with someone’s credit history, shopped potential customers to banks in search of favorable rates. Shadowy managers lurked in offices at the back, pushing everyone to do whatever it took to close.

“It was a shitty version of ‘Boiler Room.’ Just nowhere near as much money,’’ Joey said. “We’d go into the meeting room and the boss would say, ‘Do I have to throw my fucking keys on the table?’ He’d throw the keys to his Beamer and then the keys to his house. Just like ‘Boiler Room.’ ‘Is this what I have to do to get you guys to work?’”

Closing meant using tactics that bordered on illegal. Initial meetings were marked by blank pages in place of good faith estimates, which were supposed to disclose all closing costs. Inflating incomes of borrowers for what are called stated income loans was not uncommon. Few mortgage companies operated this far out on the edge. Joey happened to break in at one with all the cred of a pro wrestler. 

They targeted mostly working class minorities in Nassau, Suffolk and Queens. And they pushed the most profitable mortgages, such as the crippling MTA loan.

“This loan killed people,’’ Joey said. “The real interest rate was 7.5 percent. But they only paid one percent interest. The rest – 6.5 percent – would get added on to their loan balance. So if the real amount they owed was $1,500, they would only pay $1,000. The extra $500 would get added to the loan. They weren’t paying down the house and the loan amount was going up every month.’’

In the end, this loan also helped kill off the once-lucrative mortgage industry.

“Obviously, there were a lot of people out there pushing that because of lot of people are in trouble today,’’ said Peter J. Elkowitz, president of the Hauppauge-based Long Island Housing Partnership, a non-profit which helps negotiate better terms for struggling homeowners.

Don’t blame Joey, who got close to clients and gave them his cell phone number. It was the system that was corrupt. Joey tried to be genuine through the entire process – up to the point of disclosing the true extent of closing costs. This was a strange dance brokers engaged in with homeowners.

Many clients knew what they were in for. They had refinanced before and came back for more. Such was the magic of rising home values. Take the case of a truck driver from East Islip who regularly checked in on the status of his loan.

“He called up drunk once and said, ‘I need this money so bad.’ I think he had a gambling debt,’’ Joey said. “When we got to the closing he didn’t care about the fees. We charged people so much money. But in many cases they are taking out $50,000. All they are thinking about in their head was, ‘I’m going to get a check for $50,000.’’’

It would be easy to shake an angry fist at predatory loan brokers. Or point a finger at the banks, which have bankrupted countless families while siphoning off bailout money at the expense of us all. But when “Greed is good,’’ is co-opted as the mantra of an entire generation, you know the root cause of the real estate bubble is much deeper and complex than anyone is willing to admit.

One thing everyone can agree on is the great cash grab is over. Everyone somehow feels dirtier for it. Even the cocaine cowboys who put homeowners into loans they couldn’t afford — they internalize the guilt while offering up Suzie Orman-like insight.

“The fault lies with everyone,’’ Joey concludes. “There were so many people involved. It wasn’t just us. The banks were approving these loans. The lawyers were closing these loans. The people who we were refinancing knew they were going to get an adjustable rate and that it would adjust in two years. Everybody had their own reason to do what they were doing.’’

LIA Mobilizes Businesses Against Albany

The Long Island Association and its president, Matt Crosson, are sounding the alarm for local business owners to look at what’s going on in Albany. Apparently, the state budget is not good for Long Island.

Here is an excerpt from the Long Island Business News, in the Monday, March 30 edition, regarding the LIA’s stance:

The head of the region’s most powerful business group is calling the budget deal struck in Albany over the weekend a disaster for Long Island.

In a statement sent to the Long Island Association board, President Matt Crosson said Albany’s leaders defied logic by passing a budget during a recession that would make job creation impossible.

“Governor Paterson and the majority leaders have found a way to make doing business even more expensive,” Crosson said. “It is a budget without logic, without common sense, and without a clear understanding of what is required to bring New York back from this recession.

“A vote in favor of this budget is a vote against the future of Long Island and Long Islanders,” Crosson said.

Read the rest of the story here: http://libn.com/blog/2009/03/30/crosson-state-budget-is-a-disaster/

Here is the email blast the LIA sent regarding the issue:

It’s rare that the Long Island Association, the region’s largest business and civic organization since 1926, asks the Long Island community to get into the trenches to fight bad legislation in Albany, but this time we need your help.

The state budget agreed to by Governor Paterson, Senate Majority Leader Smith and Assembly Speaker Silver will be disastrous for Long Island and for your business. Here are a few of the many reasons why. This budget:

+ Imposes new income taxes on 60,000 Long Islanders, including thousands of small businesses
Will cause property taxes to increase.

+ Eliminates $370 million in STAR property tax offsets.

+ Will increase LIPA bills.

+ Will increase all health insurance premiums through new taxes.

+ Provides no economic development programs or stimulus for the Island.

+ Does nothing to reduce state workforce costs, as almost all businesses are doing.

You can help defeat this budget and it won’t take much time. We want you and all of your employees to send an e-mail to the Long Island state legislators. Here’s how you can do it in just a minute or two:

Go to www.LIAonline.org. Under the column “LIA Action” click on “Let Your Voice Be Heard.” Click on the boxes labeled “State Senate Members” and “State Assembly Members.” Write your e-mail. All you need to say is: “This budget will be a disaster for my business and Long Island. You must vote against it.” Click “Send E-Mail.”

Your e-mail message will go to all of Long Island’s legislative delegation.

Blog originally posted at LI Entrepreneurs.com

Add Twitter To Your Tool Box

Chances are you’ve heard about Twitter by now. It’s the latest, greatest social networking tool, a mini blog of 140 characters or less. It’s gotten the most practical use so far by media organizations breaking news or filing real-time updates from anywhere this side of a sports arena to a court room.

But its applications are nearly limitless. I added Twitter to high school sports web sites in the fall and got my first taste of its immediacy when a key player broke his leg during a football game. The item was on the web while he was still lying on the ground.

Game rained out? The message was Twittered, which broadcast to anyone who added the feed to their moble device. Imagine the lucky parent who got this zapped to their phone instead of showing up at an empty field.

I’ve recently discovered that Twitter has also hit Washington in a big way. Both Houses are on Twitter and plenty of legislators too. I belong to the feed of my local representative, Steve Israel. He does an amazing job of posting regularly. Senator John McCain has been Tweeting Top 10 earmarks for weeks now. Great stuff!

Looking for entrepreneurial wisdom? Zappos.com CEO Tony Hsieh is a regular Twitterer with a big following.

Wanna get closer to your favorite celeb? I’m following daily updates from Shaq. Eli Manning is represented too.

The bottom line is people are just beginning to scratch the surface with Twitter. If you run a social business, what better way to stay connected to your customers? Even if you’re not, the social media craze is not going away. Find a way to tap into it today.

As owner of an online media company and a former Newsday reporter, I find the scope of innovation on the net remarkable. And I know it can be daunting too. If you need any help trying to move forward, give me a shout. Better yet, Twitter me @jmolinet.

Blog originally posted at LI Entrepreneurs.com

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