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James rocked back and forth on his large feet, trying to stay warm as a dark spring sky dropped some soft, powder-white snow onto 2nd Avenue in the East Village of New York City.

James, stocky and broad-shouldered, wore a black leather jacket, blue jeans and wool cap. He said he had been a carpenter for 10 years and, at 31, was the father of twins and unemployed. He stood on 2nd Avenue near St. Mark`s Place, just to the right of Paul`s Heavenly Burgers.

Displayed on the sidewalk in front of him on a blanket were a used plastic briefcase, a pair of blue jeans, some ladies` blouses and a tattered wool trench coat. It was now nearly midnight on a Saturday.

Dozens of other street peddlers, drug addicts, petty thieves and the unemployed crowded the sidewalk, hawking TVs, videocassette players, mountain bikes, tape cassettes, secondhand pornographic magazines, stolen computers and stereo systems, kitchen appliances and clothes of all colors and styles.

One man yelled to no one in particular about a special item he was selling: ”Snap-Tools!” Another man in a black trench coat sliced through the thick crowd saying ”computer monitor, color TV.”

Men in suits and gray trench coats, elegantly dressed women (some in furs), college students and local residents strolled past the portable displays of goods.

Every night this example of alternative free enterprise opens up on two blocks of 2nd Avenue after 10 p.m. and continues until dawn. It first appeared in the late 1960s. Back then, hippies sold handcrafts, books, music and flowery clothing. Today the market has come to symbolize symptoms of the recession and the drug and homelessness epidemic that plagues New York City.

Neighborhood ambivalence

”Most people who don`t know about the street market are shocked when they see it for the first time,” said Carol Joyce, president of the Sixth and Seventh Street Block Association and a 25-year resident of the East Village.

”I have this ambivalence about it-a lot of people do. I think it serves some kind of function, recycling stuff that is thrown away. And there are people who don`t fit into the economy, and it allows them to make a few dollars.”

But the threat of crime, the garbage littered on the streets and the thriving stolen-goods market upset many of the residents in the neighborhood, she said.

For the peddlers, who always keep one eye on the police and another on their competitors, 2nd Avenue does provide a marketplace and a living of sorts. Most of the ragged entrepreneurs live on the streets and have been unemployed for years. Others, like James, are recent victims of the recession and prefer the freedom of black-market capitalism to frying hamburgers at McDonald`s for minimum wage.

”You can make $50 to $75 a day. It all depends on what you have,” said James, who asked that his last name not be used.

What James is doing is illegal; he says he pays no state or federal taxes on his income and he does not have the city license required for street vendors. But to him, this is survival.

”These people didn`t get the breaks,” he said, pointing to the crowd.

”Didn`t go to college. Some have been unlucky. You have to do what you have to do.”

James has been selling on 2nd Avenue for six months, ever since construction work dried up in the Bronx. His wife still works for the city, he said, and he puts 10 to 12 hours a day into sifting garbage cans for valuable junk. Every evening, he makes his way to St. Mark`s Place and 2nd Avenue and stays until he sells his junk.

”It all depends on the merchandise. Some people pick through the garbage. Some get it donated to them, and some break into cars.

”Me, myself, I know the good neighborhoods. You`d never believe what you`d find there. Walkmans, TVs, VCRs and quality clothes. Some people`s garbage is other people`s treasure.”

Police sweeps

He watched a few customers eye his briefcase, which was selling for $7. The interested buyers moved on, though, cutting a path through the thicket of customers and sellers. Cars pulled up and unloaded merchandise. A man with an Indian accent sought buyers for a ”very fine couch.”

Fencers ”come out every night and buy computers and other electronics,” said Paul Kobal, 31, owner of Paul`s Heavenly Burgers, whose windows look out onto the bustling activity. ”The police come daily to sweep the hordes away, but they come back.”

Police officials say New York`s strict guidelines regarding probable cause and unlawful search and seizure hamper them in controlling the trafficking. More to the point, the department`s limited manpower constantly is being stretched to deal with major-and often violent-crimes.

Most of the fencers, Kobal said, hover around 9th Street between 2nd and 3rd Avenues. There, the peddlers and thieves sell most of their expensive and valuable electronics, such as stereos, computers and fax machines. But the fencers also monitor St. Mark`s Place because there is always a thief willing to dump his hot merchandise at bargain prices.

What is usually dumped is equipment stolen from car trunks, said Brett, a 25-year-old thief. The technique is called trunk popping and is standard entry-level work for aspiring criminals. It takes one flathead screwdriver called a key to get at the goods.

Born in the East Village, Brett said he has been a thief for 10 years and specializes in fax machines and refrigerators. Over coffee one late night at the Kiev Restaurant, a 24-hour diner near St. Mark`s Place, he said the market thrives because the merchandise is cheap and high quality. Many of the fencers he supplies goods to are new immigrants.

”They want part of the American Dream, and they buy that way as a shortcut,” he said. ”When we were doing appliances, we had a Korean who was our main buyer and bought 20 refrigerators over the year for $150 and sold them to Koreans for $200.”

Bad news always comes

Kobal was cooking a cheeseburger and placing it in a basket of french fries as he recalled the two bike thieves from New Jersey who were regular customers. They came to 2nd Avenue in a pickup truck crammed with mountain bikes and sold them because it was harder for the police to trace the stolen bikes back to New Jersey.

”Anybody who gets their stuff stolen from cars or from their apartment, they know exactly where to go,” Kobal said.

But Kobal, who has owned the restaurant for three years, has grown frustrated with the peddlers. One homeless man has threatened him with a knife. Other peddlers broke into his basement and stole some food.

”The blood pressure is always up,” he said, cleaning the grill. ”It`s like dealing with a sister who is a drug addict. You know the bad news is coming.”

Back on the street, a slender, chatty black man who would identify himself only as OPP (for ”other people`s property”) bartered aggressively with a rotund customer. The customer, who sounded Australian, wanted to buy a black leather belt and a pair of Bauer hockey skates from OPP.

”I don`t want $20 for these skates,” said OPP, who raised his voice to a high-pitched whine when bartering. OPP spread his arms out from his chest and turned his palms up, bending forward, as if incredulous at the customer`s meager offer. The Australian had offered $20 for the skates and $6 for the belt. OPP wanted $30 and $7, respectively. Not a penny less.

Living day to day

James stood to the left of OPP, who drew a crowd. James remained quiet and patient. Tonight was slow, but he tried to ”flow with the punches out here.” He hoped the job market would change and he could return to building houses for $18 an hour, but he was not holding his breath.

”It`s difficult to find a job and find something you can depend on until retirement,” he said.

A buyer emerged from the crowd and examined the briefcase. He offered James $6. James accepted. ”There you go,” he said, satisfied. ”In less than an hour, I sold the briefcase for $6. Minimum wage is $4.25.”

James packed his unsold merchandise into a shoulder bag and disappeared around the corner, heading for the subway and the hourlong trek that would take him to his family in the Bronx.