August 11, 2018

A Money-Making Machine For The Government

A weekend topic on regulation starting with the Telegraph on New Zealand. “Foreigners are to be banned from buying homes in New Zealand after a spate of millionaires seeking luxury doomsday boltholes has apparently crowded out local buyers and pushed up property prices. Prime Minister Jacinda Arder’s Labour party is adamant that a law change banning foreigners from buying most types of homes in the country - due to pass in parliament next week - will help damp down property prices. David Parker, Minister for Trade and Economic Development, who is responsible for the bill, said it wasn’t just about house prices. ‘In this world of concentrating wealth, we don’t want this coterie of ultra-wealthy people overseas being able to outbid successful New Zealanders for what is our birthright, not theirs,’ he said.”

The Korea Times. “Despite a series of anti-speculation measures, the government seems to have failed to curb apartment prices in key areas of Seoul. Analysts expect further increases in the latter half of the year as new apartments in Seoul have become ‘rare items.’ The rosy outlook, however, is limited to Seoul. ‘During the past three years, a record high number of homes have been built. There is increasing concern of the supply surpassing the demand, especially in the provinces,’ said Kim Soo-hyung, a researcher at Hyundai Research Institute.”

From Macau Business. “There are calls for the government to keep rolling out property curbs despite failed attempts, as home prices are set to rise another 15 per cent this year. The property measures introduced by the government in February, as many critics predicted, have failed to curtail the gathering momentum of home prices. Although the so-called ‘spicy’ measures have turned into sweeteners for the market, the public keeps calling for more government intervention as home prices are set to pull even further away from the affordability of many residents.”

“There have been discussions earlier this year about a vacancy tax on second-hand properties in a bid to boost the number of available units for sale and rent but the government has so far been hesitant to do so, given the technical difficulties such as how to define a vacant home. Official data shows that the number of vacant units totalled 15,252 units as at the end of last year, accounting for 6.82 per cent of total residential units, up from 5.7 per cent in 2016.”

‘Legislator Ho Ion Sang stressed that the government has to look at the problem, regardless of the challenges. ‘It should not simply ignore this issue due to technical problems or divided opinions,’ he noted. ‘It should quickly start studying how vacancy tax could be implemented here, looking into the examples of regions and countries that have similar taxes in how to define vacant units.’”

From Today Online. “Property developers in Singapore are not surprisingly upset with the government’s unexpected announcement in July of new property cooling measures, with the Real Estate Developers’ Association of Singapore (Redas) president Augustine Tan saying that the move has halted the ‘long awaited’ recovery of the property market and could worsen a supply glut.”

“The frenzy in the property market is most evident in en bloc activities in the past year. Developers snapped up some 4,725,658 sq ft in gross internal area in such collective sales, about 2.5 times the area in 2011 and the third largest area since 1995. These en bloc deals bring future housing demand forward and postpone the current housing supply to the future, effectively distorting the market.”

“Besides, compared to 2015, the number of uncompleted condos and apartments purchased by the Singapore citizens, permanent residents and foreigners in 2017 increased by 25 per cent, 7.2 per cent and 27.9 per cent respectively, indicating that more foreign individual investors have jumped into the market. There is no doubt that the prices would continue to rise if the government took no action.”

“But we should not expect major housing price sliding. Home sellers are loss averse and would be reluctant to slash price to sell at a loss unless they are in urgent need of money.”

The Epoch Times on China. “The Chinese government went all out during the first half of 2018 to cool an overheated real estate market. Major cities in China have issued regulations for their local real estate markets more than 260 times through July of this year, according to data from Centaline Property Agency, one of the largest property agencies in Hong Kong. That’s an all-time high and marks an 80 percent increase in frequency compared to the same period in 2017. In July alone, more than 60 cities announced more than 70 revised sets of real estate regulatory policies.”

“Ever since it was officially declared as the ‘pillar industry that pulls the growth of China’s economy’ by the State Council in 2003, the real-estate industry has been the lifeblood of the entire Chinese economy. City governments also heavily rely on land-grant premiums and land-tax revenue as their primary source of local fiscal income.”

“This fiscal strategy of operating real estate as a money-making machine for the government, commonly referred to as ‘land finance’ in China, has inextricably linked the survival of the real estate market to the Chinese regime’s. In recent years, however, the Chinese real estate market has become overheated and is increasingly spinning out of control, as evidenced by soaring housing prices and people’s frenzy in buying properties.”

“So the Chinese regime has sought to artificially keep the market afloat, with local governments supplying land to the market, banks issuing large amount of loans, and central authorities placing specific purchasing, sales, and pricing limits. But this has only further compounded the crisis.”

From ABC News in Australia. “Banking royal commissioner Kenneth Hayne, it seems, has a great deal to answer for. If you can believe the recent steady drip of reports, Australia is in the grip of a credit squeeze that can all be sheeted home to the man presiding over one of the most keenly watched inquiries in years. As public hearings for the next round of public hearings for the royal commission into banking misconduct get underway in Melbourne this morning, a concerted campaign is quietly underway to ensure the inquiry is stopped in its tracks.”

“Not that it ever went away. Primarily, the argument put forth last year to ward off the inquiry — that the continued airing of dirty linen will harm the reputation of our banks and consumers ultimately will foot the bill — has been resurrected. It’s a perverse logic. It was the behaviour of our banks that caused the reputational damage, not its exposure.”

“It also overlooks a fundamental truism; that if the goal of the royal commission was to root out bad behaviour, including irresponsible lending practices, it stands to reason that money should be more difficult to obtain. It is no coincidence that we have world-record levels of household debt and some of the world’s most expensive real estate.”

“Last week, one of the richest men in the land made an unusual and shocking admission: he’d repeatedly been denied a bank loan. Tech entrepreneur Christian Beck, reputedly worth $775 million, claimed he was knocked back on a $6 million loan from an unnamed bank or banks, despite offering one of his multi-million dollar properties as collateral. The knockback was baffling, aside from the obvious question as to why someone worth $775 million would need to borrow $6 million. But the mystery was soon solved by Mr Beck himself with this extraordinary admission: ‘I did not have a very high level of income in terms of salary. The bank won’t give it to me because the APRA requirements around serviceability I don’t meet.’”

“There you have it. Annoying it might be, but income generally is regarded as a crucial element when it comes to servicing a loan, especially one that goes to high seven digits.”

“A few days later, Mr Hayne again was in the firing line, this time responsible for a hapless property owner who had taken a $30,000 loss on the sale of a unit in Sydney’s inner west. Having bought at the top of the market, he had been forced to sell because he ‘couldn’t afford his mortgage’ with a newborn on the way. ‘The royal commission has done the west no favours as banks tighten their lending criteria to focus now more than they ever did on serviceability,’ a real estate agent lamented.”

“If anything, these examples only serve to underscore the importance and effectiveness of the royal commission. Our banks suddenly have concerns about lending money to people who may have trouble servicing a loan. The Hayne royal commission has shone a torch into the dark recesses of the finance sector and, despite such a constrained time-frame, has unearthed enough material in a few months than our regulators have in years.”

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Comment by Ben Jones
2018-08-11 15:37:44

‘U.S. Sen. Charles Grassley, R-Iowa, has been critical of the EB-5 program in its current form and has called for the elimination of loop holes and potential for graft. “In recent years, I’ve worked on a bipartisan basis with colleagues in Congress to come up with legislative fixes that would put an end to the fraud and abuse,” he added. “Unfortunately, our work has been undercut by well-funded, big-city real estate interests—who stand to gain the most from the program’s flaws. If Congress is unwilling to implement the legislative reforms necessary to address rampant fraud, abuse and security vulnerabilities, the program should be scrapped altogether. The country and our immigration system would be safer, fairer and less corrupt.”

‘In a June 19 statement Grassley made as chairman of the Senate Judiciary Committee, he laid out several instances of graft in the program.’

‘In January, a group of over 120 Chinese nationals sued an Idaho real estate development company and claimed they were fraudulently coerced into investing over $60 million. The real estate company in question allegedly promised there was “zero risk” to invest in their specific EB-5 project, a claim that clearly violates the program’s requirements that capital be at risk. As a result, this specific EB-5 project was terminated by USCIS and the investors’ immigration status was jeopardized — all because this project misrepresented themselves in order to gain quick, easy money.’

‘In May, the SEC barred two EB-5 companies from selling securities after it was discovered the companies’ president and manager fraudulently raised $22.5 million in EB-5 capital from Chinese investors. According to the Securities and Exchange Commission, these two companies were supposed to use the raised money for the development of a condominium complex. Instead, the companies’ president and his wife stole more than $12 million in order to purchase homes for themselves.’

‘Also in May, two Maryland residents were charged with defrauding 31 immigrant investors and using money intended to create jobs after Hurricane Katrina for personal gain. An indictment claims the duo contracted with New Orleans to create a $15.5 million investment fund, but instead used the money to buy themselves vacation and rental properties.’

‘In the June statement, Grassley said, “Several months ago, my staff was briefed by officials from the Department’s Fraud Detection and National Security Directorate on its recent EB-5 National Security Concern Assessment.’

“Unsurprisingly, the report found that the program is susceptible to Ponzi schemes and financial fraud, and warned that current vetting by law enforcement systems may have missed national security concerns due to insufficiencies in vetting and data collection,” he said.’

Comment by Ben Jones
2018-08-11 15:40:35

‘How peer-to-peer lending turned middle-class Chinese dreamers into angry protesters’

‘Ahead of the planned protest, a Twitter account whose name means “Financial Refugee” posted a letter (pdf, link in Chinese) on behalf of the troubled investors, saying protest was their only recourse after their complaints had gone unanswered by authorities.’

“We can’t help but ask, the P2P online lending platform originated in Europe and America, why is it only in China that so many of them turn bad?” said the letter. “Ironically, a policy backed by official guidance has led to financial turmoil for tens of millions of families.”

Comment by Professor 🐻
2018-08-11 16:28:15

“Ironically, a policy backed by official guidance has led to financial turmoil for tens of millions of families.”

Are there any cases where government intervention makes housing markets work better, or is it categorically disastrous?

Comment by azdude
2018-08-11 16:45:15

when the bear pit turns bullish its time to unload the ranch.

Comment by Ben Jones
2018-08-11 15:44:41

‘According to reports, the Philippines has allowed over three million Chinese nationals to move to the country since 2016, with as many as 100,000 people moving to the capital of Manila. The large influx has driven up housing prices and there are reports that it is starting to be cause a strain on some of Manila’s infrastructure. Of the 3 million Chinese residents that moved to the Philippines, approximately 2.5 million were from mainland China, with the others coming from Hong Kong, Macau and Taiwan.’

‘According to a source who works for one of the casinos in the region, it is well known that the large influx has less to do with the ability to work at a casino and more to do with using the online casinos to remove money from China in a quasi-form of money laundering. The source explained:

“Prior to 2017 the Chinese nationals have always used RMB (China’s currency) to pay for offshore investments such as real estate and securities, but in 2017 the Chinese government disallowed the yuan to be used for foreign investments because the Chinese economy has been tanking and the government doesn’t want money being removed in basket loads and further devaluing the yuan. And the Chinese government has been very strict in enforcing it. Several people have been arrested and heavily fined when they are found to be breaking the rule and some have been imprisoned. For that reason, the richer Chinese nationals have been looking for other ways to get their money out. For a while Bitcoin seemed to be an option many nationals wanted to use, which was why you saw the price of the crypto currency skyrocket, but Chinese banks have been put on alert to watch for any transactions that may involve the purchase of bitcoins and bitcoin businesses in China are shut down almost as fast as they open. So, gambling is the only other real method to get money out. Chinese gangs have used casinos around the world for years to launder money, but again the new rules and edicts to border agents and banks to look for large sums of Chinese cash being taken out has made even that method risky and probably unfeasible.”

‘Online gambling is different. In many jurisdictions, it’s pretty much unregulated and it’s possible to deposit with one form of currency and take out a different form of currency, provided you are a resident of that country. Online gamblers all over the world have accounts in $USD, but withdraw funds to their native currency, whether it’s the pound, euro, Canadian dollar or Philippine peso. And that is precisely what a large number of these Chinese nationals are doing with the Philippines.’

‘They deposit money into the offshore casinos with their RMB and it’s effectively unnoticed because they aren’t physically buying anything. The casinos aren’t obligated to provide any information about deposits to a specific entity and the individual deposits are likely kept small enough to be kept under the radar with the offshore casino operator, the banks and the government. Then when they withdraw funds, they have them sent to their Philippine bank accounts, which also raises no red flags because these Chinese nationals now have a Philippine physical address. And again, the withdrawals are likely kept small enough to avoid raising red flags. At that point, because there are no limitations on foreign transactions in the Philippines as there is in China, they can then use the money for any purchases they like, including real estate in major European and North American markets. It’s money laundering lite and the Chinese nationals are using the Philippine banks and PRC (Professional Regulation Commission of the Philippines) as the means for their moving RMB out of China.”

‘This of course is all unproven, but it certainly wouldn’t be anything new. Chinese residents are known to use casinos both online and land-based to launder money. In an article I wrote last year, a Chinese national and spa owner in British Columbia used other Chinese nationals to gamble with dirty money given to them in $20 increments at the River Rock casino in Richmond, BC and then withdrew the post up money and winnings from the casino in larger bills to make it appear legitimate. Much of that original money was from illicit activities in China.’

‘And more recently Dan Bui Shun Jin was arrested at the River Rock casino on suspected money laundering. The RCMP said Jin was suspected of laundering $855 million through Australian casinos and was carrying $75,000 in cash at the time of his arrest. The U.S. also had a warrant out for his arrest for fraud over $1.4 million.’

Comment by Professor 🐻
2018-08-11 16:40:35

Why bother with risky casino gambling when you can simply speculate in Bitcoin?

Comment by Mr. Banker
2018-08-11 16:46:42

Or open up a bank branch.


Comment by GuillotineRenovator
2018-08-11 17:23:20

And where did all of this money come from? The Chinese printing press. No country has been debasing its currency like China. They are the Zimbabwe of today.

Comment by Ben Jones
2018-08-11 17:31:33

What sense does it make to let the Chinese print up a bunch of pesos and buy up an entire country like New Zealand? What kind of a cockamamie system is this?

And note not one peep out there about New Zealand being racist for wanting to protect themselves.

Comment by Boo Randy
2018-08-11 18:32:32

What kind of country lets itself be invaded and occupied like that?

Oh, wait….

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Comment by Boo Randy
2018-08-11 18:37:40

Trailer for “Tomorrow When the War Began” - a 2010 movie where a group of kids go hiking in the Australian outback, only to have their country invaded by China in their absence.

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Comment by rms
2018-08-12 10:25:19

Saved for later.

Comment by GuillotineRenovator
2018-08-11 18:45:21

It makes no sense at all. What I cannot figure out is why the world is even accepting China’s currency and allowing this to take place. It’s not like China is the friendliest, fairest land on the planet. They are dirty players.

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Comment by Ghost of Satoshi
2018-08-11 19:17:12

Ben, I live in Irvine which is ground zero for Chinese money laundering. It’s still going on, as the *only* buyers in town are mainland Chinese.

Hopefully this nonsense ends soon….so sick of them laundering their debt over here and pricing everyone out of the market.

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Comment by Professor 🐻
2018-08-11 19:40:48

It’s different in Irvine.

Property Report
Chinese Reversing Big U.S. Real Estate Buying Spree That Had Helped Boost Prices
Chinese investors become net sellers of U.S. commercial property for the first time in a decade
By Esther Fung
Updated July 24, 2018 3:54 p.m. ET

Chinese real-estate investors, facing pressure from Beijing, are reversing a yearslong buying spree in the U.S. where they often paid record prices for marquee properties like New York’s Waldorf Astoria hotel.

Chinese insurers, conglomerates, and other investors have turned net sellers of U.S. commercial real estate for the first time in a decade. They have spent tens of billions of dollars to acquire hotels, office buildings, and vast swaths of empty land to build residential towers.

Comment by Ben Jones
2018-08-11 19:43:29

I got this in an email the other day:

“Chinese investment totaled only $1.8 billion between January and May. That’s a 92% drop compared to the same period in 2017, and the lowest level in seven years, according to a report released Wednesday by Rhodium Group, a research firm that tracks Chinese foreign investment.”

Comment by Professor 🐻
2018-08-11 19:51:07

“That’s a 92% drop compared to the same period in 2017…”

Is that alot?

Comment by Ghost of Satoshi
2018-08-11 20:39:02

Well that’s certainly good news, thanks. But still feels like that 1.8 billion is all going to Irvine. Must be some strong hands here, and yes…they do feel it’s “different here”

I’m sure in the end it’ll suffer the same fate.

Comment by Anonymous
2018-08-12 11:09:57

‘In this world of concentrating wealth, we don’t want this coterie of ultra-wealthy people overseas being able to outbid successful New Zealanders for what is our birthright, not theirs,’

Yep, imagine the hysteria if Trump or anyone in Congress said something like this.

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Comment by Professor 🐻
2018-08-11 16:23:40

‘In this world of concentrating wealth, we don’t want this coterie of ultra-wealthy people overseas being able to outbid successful New Zealanders for what is our birthright, not theirs,’

I wonder if this model could work in the US to keep foreign investors armed with funny-money loans from outbidding successful Americans for what is our birthright, not theirs?

Comment by oxide
2018-08-12 05:48:26

racis/h8/rhymes with yahtzee

Comment by Mortgage Watch
2018-08-11 16:24:45

Indian River Shores, FL Housing Prices Crater 12% YOY A Mortgage Fraud Epidemic Expands

Comment by aNYCdj
2018-08-11 16:38:10

Awwwwwww British charity says heat wave put flamingoes in the mood

Comment by Mr. Banker
2018-08-11 16:43:02

“Ever since it was officially declared as the ‘pillar industry that pulls the growth of China’s economy’ by the State Council in 2003, the real-estate industry has been the lifeblood of the entire Chinese economy.”

“… the real-estate industry has been the lifeblood of the entire Chinese economy.”

You pukEs should pay attention go what is being said here: It’s not trade with the West or anything else that is now “the pillar industry that pulls the growth of the Chinese economy” but instead it is “the real-estate industry has been the lifeblood of the entire Chinese economy.” Have you got that?

Moving on …


“So the Chinese regime has sought to artificially keep the market afloat, with …”

1. Local governments supplying land to the market,

2. Banks issuing large amount of loans, and

3. Central authorities placing specific purchasing, sales, and pricing limits.

IOW real estate, “the pillar industry that pulls the growth of the Chinese economy” is an industry that is totally - TOTALLY - manipulated.

Comment by Mortgage Watch
2018-08-11 18:17:03

Arvada, CA Housing Prices Crater 6% YOY As Analysts Forecast +50% Decline Likely For Denver Area

Comment by Boo Randy
2018-08-11 18:30:41

“Foreigners are to be banned from buying homes in New Zealand after a spate of millionaires seeking luxury doomsday boltholes has apparently crowded out local buyers and pushed up property prices.

Oh dear. But where will Zimbabwe Ben, Yellen the Felon, and their Wall Street grifter accomplices flee to when the financial house of cards they created with their Keynesian radical monetary experiments comes crashing down and the pitchforks and torches come looking for them?

Comment by Ghost of Satoshi
2018-08-11 19:19:04

They already bought their compounds, and if they don’t own one they certainly have friends that will pick them up in the helicopter when it really hits the fan.

Comment by Ben Jones
2018-08-11 19:38:18

And fly where?

Comment by OneAgainstMany
Comment by Mr. Banker
2018-08-11 20:12:26

Hey, here’s another floating city. Maybe they can fly there …

BTW, if any of you pukes want to, er, get in on the ground floor of this floating city drop by my bank and we will have a little chat.

(Pssssst … don’t forget to bring your credit card.)

Comment by Ghost of Satoshi
2018-08-11 20:41:44

I’m sure they have a suitcase of cash standing ready (like a nuclear football) to pay everyone off along the way.

Sickening, but money will talk if it did hit the fan. Personally I don’t think we’ll see zombies and emergency flights to New Zealand, but you never know.

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Comment by Anonymous
2018-08-12 10:52:23

Most people will just blame whoever is currently in the White House.

Comment by Mortgage Watch
2018-08-11 19:52:05

Tarzana, CA Housing Prices Crater 11% YOY As Los Angeles Area Housing Demand Collapses

*Select price from dropdown menu on first chart

Comment by OneAgainstMany
2018-08-11 20:10:29

People talk about building walls to keep out illegal immigrants. Other people say what is really needed is to build a wall around the social safety net and welfare system. But in my opinion, the biggest wall that needs to be built is around real estate.

The influx of foreign money is arguably having a much bigger detrimental effect to people who actually have to compete with ill-gotten gains and other corrupt financial systems. The problem is that there are so many people on the inside who benefit from this influx of cash and inflated prices. It makes me think of an anecdote from my life.

When I was younger and dating the woman who is now my wife, we both went to a protest to protest the US invasion of Iraq. My wife’s teacher friend asked her about this the next day at work. My wife said to her friend, “What is your opinion on the war?” She said, “Well, my dad makes bombs, so we’re for it.”

Comment by OneAgainstMany
2018-08-11 20:17:06

I read this article earlier this week and I thought about 2banana. We often talk about pension obligations and what they might mean for housing prices. Last week I think Carl Morris and I figured out how much a specific Chicago house would need to be discounted to account for unfunded pension obligations. Well, the WSJ has a really good article discussing just this situation.

In light of the Federal Reserve Bank of Chicago’s proposal to raise property taxes to fund pension obligations, prospective homebuyers need to think long and hard about the house they are purchasing. I’ve often believed that when you purchase a house, you are purchasing not just the house itself, but the neighborhood, the schools, the city, the state, the country, and the surrounding economy. You are also purchasing the pension obligations, so figure out what those are before you purchase.

The Stealth Pension Mortgage On Your House

The Wall Street Journal
August 5th, 2018

Rob Arnott and Lisa Meulbroek

“Many states protect public pensions in their constitutions, meaning they cannot be renegotiated. Future pension obligations simply must be paid, either through higher taxes or cuts to public services.”

“Is there a way out for taxpayers in states that are deep in the red? Milton Friedman famously observed that the only thing more mobile than the wealthy is their capital. Some residents may hope that they can avoid the pension crash by decamping to a more fiscally sound state.”

“But this escape may be illusory. State taxes are collected on four economic activities: consumption (sales tax), labor and investment (income tax) and real-estate ownership (property tax). The affluent can escape sales and income taxes by moving to a new state—but real estate stays behind. Property values must ultimately support the obligations that politicians have promised, even if those obligations aren’t properly funded, because real estate is the only source of state and local revenue that can’t pick up and move elsewhere. Whether or not unfunded obligations are paid with property taxes, it’s the property that backs the obligations in the end.”

Comment by BlueSkye
2018-08-11 21:18:49

Or reality might set in.

Comment by Professor 🐻
2018-08-12 06:27:30

Poway, CA has similar issues, thanks to their infamous Capital Appreciation Bonds. I don’t know exactly where the boundaries of the Poway School Facilities Improvement District are drawn, but homeowners inside this boundary should hope and pray that real estate goes up enough so that debt repayment on these interest-only bonds doesn’t impose a crushing tax burden on future property owners in the District.

Case Study: Poway Unified School District’s Egregious Debt Finance

Poway Unified School District created a special School Facilities Improvement District in 2007 and asked voters in February 2008 to authorize $179 million in bonds to finance capital improvements. The bond measure passed with 63.9% support, as it qualified under Proposition 39 for a 55% voter approval threshold.

As a campaign strategy, the district promised voters that the bond measure would not require a tax increase, supposedly because assessed property values would rise enough over time to bring in more tax revenue and pay off the debt service. To keep this promise, the school board subsequently adopted some excessive debt financing schemes.

From 2008 through 2011, the district borrowed the $179 million by issuing four series of bonds, including Current Interest Bonds and non-callable Capital Appreciation Bonds, with some bonds issued to refund earlier bond issues. It even sold some 40-year bonds at the maximum legally allowed interest rate of 8 percent. It used numerous controversial debt finance practices, such as selling bonds at a 20 percent premium over face value, and ended up incurring issuance fees totaling more than $6.7 million.

Perhaps people in the Poway Unified School District did not comprehend the dangers at the time, but the school board realized the district was doing something questionable. In 2010 it filed a validation lawsuit to subvert future lawsuits against their next bond finance deal. This provoked a warning letter from the California Attorney General, but in the end no party chose to be a defendant, thus giving the district legal cover to proceed.

Property owners in the School Facilities Improvement District now have the burden of paying $1.27 billion in debt service through 2051 for the privilege of borrowing $179 million. Poway Unified School District was described in the news media as having “shot to fame” as a “poster child for an era of reckless and risky school bond borrowing” through bond sales that have “reached legendary status.” And it became a rare example of voters making school board members accountable for its decisions on bond finance.

Comment by Professor 🐻
2018-08-12 07:04:36

Want to know what a home is really worth? Sell it in a no-minimum-bid auction.

This one is apparently worth less than $2.2 million.

PS Please explain the cryptic information on Zillow about the recent home sale at the auction reserve price, if you are able to do so. I’m not a lawyer, but this looks to me like some lawyer blowing smoke into the eyes of the interested public.

No takers at auction for Tony Gwynn’s Poway home
Mark Saunders
10:08 AM, Jun 6, 2018
2:40 PM, Jun 6, 2018
Copyright Associated Press

SAN DIEGO (KGTV) - There were no takers at a Wednesday auction for Major League Baseball legend and San Diego icon Tony Gwynn’s Poway home.

The two-acre estate in an exclusive North County neighborhood will return to the ownership of the lender who put the home on the auction block.

The posted legal notice for the auction said $2.5 million was still owed on the home, with the minimum bid for the home set at $2.2 million.

Gwynn’s skills earned him fame and millions but some bad investments forced him to file for bankruptcy in 1987.

Comment by Professor 🐻
2018-08-12 09:20:10

Yeah, right.

Price History
Date Event Price
07/04/18 Listing removed $2,226,000
06/29/18 Listed for sale $2,226,000
06/12/18 Sold $2,200,000

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Comment by Professor 🐻
2018-08-12 13:52:35

My hunches:

“06/12/18 Sold $2,200,000″

This was not a true arm’s length sale, but rather a book value the lender recorded for the foreclosed house that wouldn’t sell for this amount at auction.

“07/04/18 Listing removed $2,226,000
06/29/18 Listed for sale $2,226,000″

If it wouldn’t go for $2.2 million at auction, then surely there’s some greater fool ready and waiting to pay $26,000 more than that amount…or not.

“Zestimate®: $2,504,781″

What kind of legal marijuana are the Zillow people smoking?

Comment by rms
2018-08-12 16:36:40

Good thing the hillbillies got Zillow’s back!

Comment by Professor 🐻
2018-08-12 19:06:54

“Good thing the hillbillies got Zillow’s back!”

Please elaborate.

Comment by Anonymous
2018-08-12 11:05:24

“…a rare example of voters making school board members accountable for its decisions on bond finance. ”

Really? The school board members are going to have to pay the $1 billion plus?

My hunch is they won’t pay any of it. They will retire and move to Nevada or Arizona.

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Comment by Anonymous
2018-08-12 11:06:46

P.S. Thanks for reminding me about the Poway train wreck.

Comment by Professor 🐻
2018-08-12 13:44:09

“…a rare example of voters making school board members accountable for its decisions on bond finance.”

If you read the article I linked, then you learn that several school board members lost their seats after the notorious bond issue gained publicity in high profile MSM financial news sources, including The Financial Times of London.

One of those former board members is a personal friend. I’ll eventually get around to asking him about his involvement, but it’s too soon.

The great epochs of our lives come when we gain the courage to rebaptize our greatest evil as our best.

– Friedrich Nietzsche

Comment by oxide
2018-08-12 06:30:20

can’t pick up and move elsewhere.

Until the middle/upper classes pick up and move elsewhere and nobody is left to buy the houses at those inflated tax revenues. RJ-not-in-Chicago did precisely that. Fair pensions are one thing, but there are too many stories of 52-year-old firefighters retiring on six-figures.

By the way, the children who grew up in those states? They have no compunction about moving to another state instead of coming back home to the support the teachers who taught them or the police/fire who protected them. The kids had to go where the jobs were.

Comment by Anonymous
2018-08-12 11:18:48

I wish I could read that article, but I’m too cheap to subscribe to the WSJ. :D

Comment by rms
2018-08-12 12:56:18

Bypass Paywalls v1.3.7 <— browser addon

Comment by Mortgage Watch
2018-08-11 20:41:17

Littleton, CO Housing Prices Crater 11% YOY As Denver Area Homeowners Lose Their Shirt

Comment by Taxpayers
2018-08-12 03:40:54

Any good jingle mail info resources?
My mil Florida has to fold w 2 refis!
If the irs is enforcing loan forgiveness as income it’s a death trap.

Comment by Apartment 401
2018-08-12 04:13:06

US students may collectively owe $2T in loans by 2021:

“In the last decade alone, student debt has surged by nearly 60 percent. And the latest forecast will only up the ante and financial pain. At this predicted growth rate, millions more are likely joining today’s cadre of 44 million American student-loan borrowers, with the average undergrad in 2017 owing $39,400, analysts say.”

No “pent-up demand” for $500,000 starter homes happening here.

Comment by Professor 🐻
2018-08-12 06:30:24

The collective student loan debt burden always goes up.

Comment by Apartment 401
2018-08-12 05:36:40

If you are considering moving to Denver:

“New federal data reveals that, per capita, Colorado is second in the nation for deaths caused by road rage and aggressive driving. Almost one in 10 deadly car accidents in the state in 2016 were related to road rage.”

Comment by Anonymous
2018-08-12 11:21:12

Why are people there so angry? Look at the beautiful place they live in. Maybe more people there need to start smoking MJ, I’ve heard it makes you mellow.

Comment by rms
2018-08-12 13:50:29

ISTR a story about someone sitting in their car waiting at a street light when a pedestrian tried to pull the driver out of the vehicle and steal it, a car jacking. However, the driver was an off-duty policeman who shot and killed the assailant during the struggle. I think this was in Aurora.

Comment by Anonymous
2018-08-14 07:22:34

[Test post]

From Musk’s email:
“The oil and gas companies, the wealthiest industry in the world—they don’t love the idea of Tesla advancing the progress of solar power and electric cars. Don’t want to blow your mind, but rumor has it that those companies are sometimes not super nice. Then there are the multitude of big gas/diesel car company competitors. If they’re willing to cheat so much about emissions, maybe they’re willing to cheat in other ways? ”

With Musk’s new disclosures about his talks with Saudi Arabia, it’s clear that this email was written long after he knew the biggest pool of oil money was interested in financing, not destroying, his company.

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