Bits Bucket for September 14, 2013
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
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View the HBB Photo Gallery *updated 4/13/2008
Latest total government (federal, provincial, and municipal), business, and household debt statistics for Canada (to the end of June 2013)
http://stateofthecanadiannation.blogspot.ca/2013/09/latest-total-government-federal_13.html
Latest post by Doug Noland at the Prudent Bear web site
Blinder, Summers and Monetary Policy
http://www.prudentbear.com/2013/09/blinder-summers-and-monetary-policy.html
In case anyone is interested Doug Noland usually (but not always) puts out a market newsletter on Fridays (around 7:00 PM west coast time).
In can be found by going to the following link, and under the “Commentary” drop down box at the top of the page click on “Credit Bubble Bulletin”
http://www.prudentbear.com/
Florida foreclosure fighters fight each other
By Kimberly Miller
Palm Beach Post Staff Writer
Posted: 4:24 p.m. Friday, Sept. 13, 2013
Foreclosure fraud fighters are battling each other in court after a Palm Beach Gardens woman was accused of stealing someone else’s ideas and work to win an $18 million whistle-blower lawsuit against major lenders.
Ignacio Damian Figueroa, a Fort Lauderdale resident who runs Stopforeclosurefraud.com, says he did thousands of hours of research and gathered flawed documents for Lynn Szymoniak believing he would be included in the lender lawsuit.
This story continues on our new premium website for subscribers, MyPalmBeachPost.com. Continue reading/get access here
“Housing’s ‘Shadow Inventory’ Still Haunts Banks”
http://news.yahoo.com/housings-shadow-inventory-still-haunts-banks-152949909.html
With tens of millions of excess empty houses and another 35 million additional houses that are just beginning to empty as boomers expire, banks themselves will become haunted houses.
“Don’t forget to report back everything from here” -yesterday’s bucket from ha to inch
HA
I’m on the commercial side, which is a different animal. As I home buyer I needed to know their programming.
If realtors are liars and Leslie young is a liar, say it right here.
In my opinion, the residential side of the reic is full of bad seeds in most cases. I don’t think Young is still employed by NAR. Is she? I am not a member.
Commercial RE is more professional. I deal w/ cpa and legal eagle types. Residential is emotional, whereas commercial is all about dollars and cents.
say it.
I thought hbb-ers might enjoy this series of photos in an article in Wired Magazine if they hadn’t already seen it.
http://www.wired.com/rawfile/2013/09/michael-light-aerial-photos/?mbid=social11892404
An excerpt from the article:
Michael Light often snaps his photos from a two-seater plane — at a bumpy 70 mph — that he pilots himself at the same time, but you’d never know it from his well-composed aerial shots. From swimming-pooled suburbs in Phoenix to razed hills awaiting their luxury homes in Nevada, Light has been documenting the western U.S.’s unique topography from the air for the past decade.
In his series on Black Mountain, Nevada, Light’s photos put viewers in the plane with him as he glides over 640 acres of dynamite-flattened hilltops, carved through with pristine roads and cul de sacs linking graded house foundations. But there are no houses. No lawns, no pools, no sidewalks. No guard-staffed gates. This is the site of the Ascaya luxury housing development, which has lain dormant since the economic crash of 2008.
“Once they get built, it’s hard to un-build them,” says Light. From the air the sculpted earth reads like a strange code cut into the brown hills.
The Sun Belt cities experienced the most rapid growth of any American urban area in the early 21st century, and were hardest hit in the economic downtown. The ferocious demand for housing — over-sized, over-watered trophy housing — resulted in major alterations to the landscape.
The theme continues in Light’s work on Lake Las Vegas, a complex of luxury housing, country clubs and casinos fringing an artificial lake. The photos capture the surrealism of these “instant cities” made even more uncanny by their stalled development. Huge faux-Mediterranean mansions and irrigated yards neighbor bleak scrub brush. Residents use the empty lots next door for parking. Swaths of velvety golf lawns are framed by barren dirt.
“What humans do stays evident for a long time,” says Light, explaining his attraction to the region. Light, who is based in San Francisco, focuses on how economic vacillations impact our terrain and the American sense of entitlement toward homeownership. As Light puts it, these developments promised a dream of “classless classes, endless exuberance, Medici living for the everyday guy and a castle on the cheap protected from the politics gathering just outside the gates.”
Wow! I see some blue swimming pools at seemingly empty houses. Must cost a lot to maintain.
If you painted the bottom of a pool blue and then just let it sit empty, it would still look blue from the air. I’m not clear why you assume there would be maintenance costs in this case?
Maybe if there are indeed aliens in outer space and they visit the earth, they would call these NV place home.
Two things I noticed in these photos:
Is the pavement already cracked (due to heat perhaps?) in the Sun City photo? I wonder what the plaster/stucco on the house looks like?
That is a desolate looking freeway interchange in Mesa! Wonder if the money was “pork”?
California city, I think, still has hundreds of acres of flattened neighborhoods and streets from decades ago when a big developer thought “they will come if you build it.” probably the roads in some cases have gone to desert.
http://www.latimes.com/news/local/la-me-cal-city-html,0,196667.htmlstory
Florida (I think this is from the 60’s)
Royal Fakapalm
https://maps.google.com/maps?q=Royal+Fakapalm,+Collier,+FL&hl=en&ll=26.025936,-81.471863&spn=0.088233,0.140247&sll=26.025936,-81.471863&sspn=0.176467,0.280495&oq=royal&t=h&gl=us&hnear=Royal+Fakapalm,+Collier,+Florida&z=13
The checkerboard certainly looks dull, doesn’t it? I guess in the 50s it did not seem so bad since it was all new for the GIs and their wives and they were just happy the war was over. Particularly the late 50s with both WWII and Korea war was over. They just wanted to make babies
not war
“But there are no houses. No lawns, no pools, no sidewalks. No guard-staffed gates. This is the site of the Ascaya luxury housing development, which has lain dormant since the economic crash of 2008.”
If only I had an airplane, I could document similar areas between Black Mountain and the Pacific Ocean in North San Diego County.
If I can muster the will, I may try hiking up the west side of Black Mountain, which might afford a good vantage point from which to document the thousands of graded lots that have sat ready to build out for five years, as soon as somebody rings the bell to indicate the housing crash is over.
For clarification, there is also a Black Mountain in North County San Diego (not to be confused with the one mentioned in the article).
That is some beautiful dirt work. Thanks for posting Carrie.
Wow, earthwork is really expensive. Thanks, CarrieAnne.
My pleasure. Thought these photos were pretty amazing.
Some of those areas screamed erosion or landslide to this east coaster. In 1 or 2 shots, there were houses at the bottom of huge unlandscaped drop-offs. I couldn’t sleep at night w/any high precip or windstorms moving through.
I noticed that one in particular. One good Boulder-like rain and the entire subdivision is sluice. What were they thinking…?
Prepare For Tough Times If Your Job Has Anything To Do With Real Estate Or Mortgages
————
If you have a job that involves building homes, buying homes, selling homes or that is in any way related to the mortgage industry, you might want to start searching for alternate employment…
http://theeconomiccollapseblog.com/archives/prepare-for-tough-times-if-your-job-has-anything-to-do-with-real-estate-or-mortgages
And prepare for tougher times if;
a) You believe a depreciating house is an “investment”
b) You bought a house 1998-current. Largest losses for those who bought 2010-current.
I think you may enjoy reading this Ben along with others;
http://www.city-journal.org/2013/23_3_snd-jeremy-scahill.html
when does the herd finally figure out that printing money to support the economy is actually a bad idea? Is it when they finally have to start paying it back? Is it when the interest on the borrowed money can no longer be paid?
As the Fantasy Dies: “Panic Will Ensue”
Mac Slavo
SHTF Plan
September 14, 2013
The US government may have funded studies and propaganda material which says that people will not panic, loot or go hungry in the midst of a crisis, but the fact of the matter is that history has shown otherwise.
It’s often the case that, despite countless warnings from those considered to be fringe lunatics, the vast majority of the populace is blindsided by horrific, paradigm-altering events. The signs are almost always there, but people simply refuse to believe it can happen to them. ”It” always happens somewhere else, and we get to watch it play out on television from the comfort of our living rooms.
But, as financial guru and strategic investor Bill Fleckenstein points out in the following highly insightful interview with King World News, America’s fantasy of unlimited borrowing, consumption and confidence will soon be revealed for the sham that it really is. And when the masses realize what has happened – that the government and Federal reserve are trapped and the “great unwind” finally begins – it will lead to nothing short of widespread panic on a level never before seen.
And this time, it’ll be right outside of our front doors.
Right now, people continue to believe that the same idiots that created all of these problems, namely the central banks, are going to somehow get us out of it with the exact same policies that got us into it, only at a much higher (aggressive) level of pursuing those policies.
We’ve had so much artificial stimulus, and we’ve misallocated so much capital. And over the couple of decades we’ve been doing this we’ve kind of broken the economy and the financial system. So, I don’t think you can worry about what’s on the other side. We haven’t even gotten people to understand the charade that we have.
What the masses have done over and over again is to believe one more time that it’s all going to be OK … We are in a unique moment in history. The whole world is printing confetti, and (yet) people seem to think that’s going to work out fine.
The longer you keep pursuing insane policies, the more you pile (them) on top of each other, the worse it gets … So, when the Fed can’t print money and we have to deal with this, it’s going to be brutal.
when do they tell the public that they will be paying for another wall street party for the rest of their lives?
I was skeptical of the stock market rally ever since it began to take off after the so called crises. I did not see the economy improving at all. I still dont think the economy has improved.
I kept seeing the market go up on low volume on what seemed like was bogus data unconnected from reality.
It seemed like the insiders had an agenda based on inside information from the money printers.
Like they say: Its a big club and your aint in it.
Prepare for a 10% takings of your electronic assets. And when that won’t be enough they will try to take another 10%. That will be the end of them as the Americans turn Austrian economics libertarian.
LOL!
Never happen. Who would ever put their money in a bank again?
Cyprus will repeat in all developed nations. When you pay your taxes you give permission to IRS to take electronically. You provide the routing number. But naive people think if you never give government your routing number they will never be able to take from your electronic accounts without asking.
Skroodle, you are naive.
Bill you are bonkers. But at least you have your gold and guns.
Is that all you can come up with Skroodle? From the outside looking in, you are bonkers for having faith in the thugernment. I am glad I am a libertarian.
Here’s some lead ins to story’s on Yahoo Finance this morning:
‘Wall Street is running wild over what Twitter is worth, and whether Main Street investors will get fleeced as badly as they did on Facebook.’
‘Banks are still ‘too big to fail’, says SNB chairman’
‘Top 1% Getting 95% of Income Gains: Is Washington Responsible? A recent study reveals that the top 10% of earners in the U.S. took home more than half the country’s total income in 2012.’
‘Five years after Lehman Brothers’ bankruptcy plunged the global economy into chaos, over 11 million Americans remain unemployed — including nearly all Wall Street CEOs at the center of the crisis. But none of the executives have faced any criminal charges nor appear to be suffering for their contributions to the worst recession since the Great Depression. Quite the contrary.
The former CEOs of Wall Street’s biggest firms circa 2008 are “living in quiet luxury,” according to a report this week by The Center for Public Integrity. The 5 former CEOs examined by the Center – Dick Fuld (Lehman Brothers) Jimmy Cayne (Bear Stearns), Stanley O’Neal (Merrill Lynch), Chuck Prince (Citigroup) and Ken Lewis (Bank of America) — took home nearly $1.5 billion in total compensation from 2000 to 2008. It’s an astounding amount of money, especially given their collective incompetence and mismanagement, for which we’re all still paying.’
Here’s a good thread for posts like, ‘it would have been a lot worse if these CEO’s were punished’ or ‘imagine the suffering if we hadn’t bailed out the banks’ or ‘Obama gets a pass from thinking people’ or ‘Romney!’
“A recent study reveals that the top 10% of earners in the U.S. took home more than half the country’s total income in 2012.”
We just had to ask the wealthiest Americans to take a little bit more.
It’s an astounding amount of money, especially given their collective incompetence and mismanagement, for which we’re all still paying.’
You left out all that “shareholder value” they
extractedincreased until their companies fell off the cliff.These men were extremely competent at lining their own pockets and managing their way into extreme wealth, the public be damned. That sort of business continues today, just being performed by different miscreants.
“These men were extremely competent at lining their own pockets…”
I was just about to post that. What they accomplished for themselves is the very definition of competence. It’s only when you define competence as managing a financial institution in a way that benefits shareholders, employees, and customers that things get dicey.
They were very very lucky.
Many people get lucky and assume its due to their amazing abilities. One reason why successfull dot com millionaires rarely strike gold twice.
‘Top 1% Getting 95% of Income Gains: Is Washington Responsible? A recent study reveals that the top 10% of earners in the U.S. took home more than half the country’s total income in 2012.’
This clearly shows the mentality of the left. They view income as “the country’s” income as if everyone contributed to earning it and should have a share in it.
A recent study reveals that the top 10% of earners in the U.S. took home more than half the country’s total income in 2012.
Let’s rephrase it, then:
A recent study reveals that the top 10% of earners in the U.S. took home more than half of the total income earned in the country in 2012.
Sound better?
This clearly shows the mentality of the left. They view income as “the country’s” income as if everyone contributed to earning it and should have a share in it.
This clearly shows the brainwashed mentality of the right. They view a country’s income as “only their” income as if they don’t live within the people and country that made their outsized share of income possible.
‘Wall Street is running wild over what Twitter is worth, and whether Main Street investors will get fleeced as badly as they did on Facebook.’
Since when is it illegal for Wall Street to fleece Main Street investors who willingly gamble on IPOs?
“Top 1% Getting 95% of Income Gains”
And in other shocking news, if you stick your arm in a deep fryer, you will be burned.
“Top 1% Getting 95% of Income Gains”….And in other shocking news,
It is shocking news as those figures are so different from America’s history that it isn’t even funny.
Those are not figures seen in economically/socially healthy countries.
Those type economic figures can lead to civil unrest.
Those figures come from 32 years of supply-side, trickle-down, sold a pig-in-a-poke, shoved-down-our-throat, propagandized failed false economic religion.
propaganda material which says that people will not panic, loot or go hungry in the midst of a crisis, but the fact of the matter is that history has shown otherwise.
What are some examples of these panicked looting starvation periods?
printing money to support the economy is actually a bad idea? Is it when they finally have to start paying it back
If the Fed can print dollars (backed by nothing) from a laptop at Starbucks, why’s everybody freaking out about not paying back dollars (backed by nothing) printed on a laptop at Starbucks?
‘not paying back dollars (backed by nothing) printed…’
They bought government bonds and MBS. Yes, holders of these expect to be paid back. Anyway, the Fed will probably sell these before they mature, so it will be in pension funds, etc.
In other words “the great equalizer”.
I get the impression most of the herd fails to recognize that higher interest rates will likely usher in lower housing prices.
lower housing prices
If you’re buying with cash.
These days flipping pays in California cities if fix it up nice. I guess I won’t be able to afford a city house ever.
Zillow:
Central Richmond - SF- home underwent extensive renovations this year… kitchen w/ abundant cabinet space, stone counter tops, top of the line appliances incl. Bertazzoni stove, Fisher Paykel refrigerator.
07/23/2013 Sold $1,300,000
06/20/2013 Listing removed $1,098,000
06/07/2013 Listed for sale $1,098,000
01/25/2013 Sold $759,000
03/07/2003 Sold $600,000
You should be happy for the good fortune that it’s not you who will sustain the massive losses from borrowing an inflated amount for what is always a depreciating asset.
This is fraud for sure.
^^Undoubtedly. Massive fraud is what is driving prices higher, just like last bubble.
^
Exactly.
Agree. Possibly money laundering.
We bought in NorCal in the mid-1990s. All our neighbors thought we were crazy for buying, as they had lost a bundle in the crash that started around 1989. Prices were below $90/sq ft at the time.
Patience!
WaPo: Real estate tax lien sales canceled after Post investigation
Top District leaders said Friday that they will institute broad reforms that would protect property owners from losing their homes over small debts, including canceling dozens of tax liens sold at the annual auction two months ago and creating an ombudsman to work with distressed homeowners.
The move by Mayor Vincent C. Gray and Chief Financial Officer Natwar M. Gandhi, which was announced in an evening news release, includes proposals to cap the fees that can be charged to homeowners at $2,200 and to ban sales of liens of less than $2,500 on primary residences.
Gray (D) said that “from this point forward, no District residents whose property has been sold at a tax-lien sale will be at risk of losing their homes through this process if they have extraordinary circumstances that warrant a re-examination of their cases.”
The changes to the century-old program were prompted by a 10-month Washington Post investigation that exposed a system that has allowed poor and elderly residents to lose their homes over debts of only a few hundred dollars.
Sidebar: Homes for the taking: For decades, the District has placed liens on properties when homeowners failed to pay their tax bills, then sold those liens to investors who could take the homes through foreclosure if the owners didn’t repay the debt with interest.
Part 1: Left with nothing
An investigation finds widespread foreclosures over often tiny amounts, done with cooperation of government.
Part 2: Suspicious bidding
In the District, six firms took turns winning tax liens on properties worth $540 million.
Part 3: Mix-ups put homes in peril
The D.C. agency sells hundreds of tax liens by mistake, even after the bills have been paid.
Calls for D.C. tax lien reform went unheeded
Hi. I’ve posted several times about the spike in inventory (listings) here in suburban Boston. More places for sale then I have ever seen in 4 years of monitoring. Also land for sale. And the stuff is moving. Because why the number of listings is high they change - that is different properties for sale day to day. Prices up a little bit but not dramatically. Some of the listings now state “offers by Monday 6PM” like in the height of the bubble. People rushing to buy before the increase in rates or reduction in conforming loan limits in January?
What do people see in your markets?
I reported a few days ago I’m seeing an increase in listings and auctions. The listing increase is odd because this is the time of year listings were historically removed as we head into the holidays and snow potential.
I think I found HA on youtube:
http://www.youtube.com/watch?v=kHcNXmsrk68
…without a doubt on a relentless mission for the sake of humanity against the blood thirsty R.E. Vermin
That was a beautiful sloth.
I dunno why this took so long to occur to me, but it just did this morning:
Looking at the effects of the massive housing intervention that the Fed has been engaged in, which now have housing prices in Vegas skyrocketing: we now have the Bernanke Put—e.g. the housing equivalent of the Greenspan Put.
The Greenspan Put effectively guaranteed that the stock-market would always go up; whenever the market tanked, massive injections of liquidity would put it back on an upward course.
The Bernanke Put guarantees that the price of your house will always go up.
Future generations will be conditioned to buy every dip in housing.
“Future generations will be conditioned to buy every dip in housing.”
I assume you mean future generations of all-cash Wall Street, Chinese and Canadian investors, as end-user U.S. owner-occupant buyers are already largely priced out by the echo bubble price surge.
Punch bowl panic
By Jennifer Rubin, Published: June 21 at 9:45 am
Most of the attention inside the Beltway on Thursday was on immigration reform. But the real Perils of Pauline drama was playing out on the markets.
The Post reported:
This quake revealed the fault line in Ben Bernanke’s Fed policy that has troubled conservatives for years. The problem with pumping liquidity into the markets as the Fed has done with its unprecedented bond-buying is that at some point it has to stop. The phenomenon, commonly referred to as taking the “punch bowl” away, has been particularly worrisome to conservatives since growth and job creation remain so anemic. In other words, what meager growth and recovery we’ve had could evaporate once the Fed stops pumping cash into the economy.
…
what meager growth and recovery we’ve had could evaporate once the Fed stops pumping cash into the economy.
Since nobody is asking the tough question..I will do it.
If QE is so great and has helped the economy and jobs, why stop at $85 bill a month? Why not double or triple it?
I believe a number of prominent economists have already asked your tough question long ago.
Brad Delong and Mark Thoma Do Not Like the Communications Vehicle
Saturday ~ October 16th, 2010 in Economics
Delong:
Thoma:
…
“The problem with pumping liquidity into the markets as the Fed has done with its unprecedented bond-buying is that at some point it has to stop.”
Says who?
But why can’t quantitative easing go on forever?
When a jury speaks, it’s time for the prosecutor to sit down.
Zimmerman prosecutor takes hit in court of public opinion
Yamiche Alcindor and Jordan Friedman, USA TODAY 11:14 a.m. EDT September 14, 2013
Angela Corey continues to call George Zimmerman a “murderer.” Now, “to quell racial tension,” some want her removed from a new case in which a white teen is charged with killing an unarmed black teen.
Angela Corey, the controversial state attorney at the heart of the prosecution of George Zimmerman, has been facing tough criticism by some who say Zimmerman’s acquittal proves she can’t follow through on her characteristic bold moves.
Still, Corey uses the law to pursue the justice she wants. With the nation questioning her decisions, she fiercely defends herself against those who think her ambition eclipses the skills she needs to pull off such legal gymnastics.
Before Corey made national news by charging Zimmerman with murder for killing Florida teen Trayvon Martin, the state attorney was no stranger to calculated risks. She had already made a 12-year-old face first-degree murder charges.
She also put a woman in prison for 20 years for firing at, yet missing, an allegedly abusive husband, the prosecutor’s office says. Now, a growing number of critics describe her as a desperate prosecutor who regularly overcharges defendants and is more interested in making a name for herself than in seeking justice.
“She had the worst reputation in Florida for overcharging and the worst reputation with professional responsibility,” said Alan Dershowitz, a Harvard Law School professor explaining why Corey should not have tried the Zimmerman case. “There are some great prosecutors in Florida and across the country. She’s not one of them.”
…
She also put a woman in prison for 20 years for firing at, yet missing, an allegedly abusive husband, the prosecutor’s office says.
————————————————————————-
Wait a minute?
Was it the case with the black woman?
They left out some facts:
https://www.youtube.com/watch?feature=player_embedded&v=blBJeyO5rjc
“She had the worst reputation in Florida for overcharging and the worst reputation with professional responsibility,” said Alan Dershowitz, a Harvard Law School professor explaining why Corey should not have tried the Zimmerman case. “There are some great prosecutors in Florida and across the country. She’s not one of them.”
…
Exactly. A better prosecutor would have brought a lesser charge against Zimmerman- and won.
Given the Stand Your Ground law and that his nose was getting broken and his scalp was getting lacerated, what charge would have possibly stuck?
Reckless homicide, manslaughter, or some such.
Or whatever they get him with the next time he shoots someone.
Given that the Fed nowadays is making political allocation decisions, such as showering the housing sector with money, should the Fed Chair position be put to vote?
The rear view mirror of history will show Lacker was right.
Thursday, August 29, 2013 - 16:39
Fed’s Lacker Q&A:Fed Should Start Tapering In Sept,Start W/MBS
By Karen Mracek
–Should Roll over Maturing MBS Into Treasuries
–Expects 2% GDP Growth In Fall; Not Sure Where More Would Come From
–Worried About Channeling Too Much Credit to Housing, Overheating
NEWPORT NEWS, Va. (MNI) - Richmond Federal Reserve Bank President Jeffrey Lacker said Thursday the Fed should not only begin the tapering process at the next FOMC meeting, but it should begin by scaling back purchases of mortgage-backed securities.
“I’d like to see us reduce MBS purchases first,” Lacker said in response to a question from MNI. “In fact, I’d go further and advocate that we roll over maturing MBS into Treasuries rather than into MBSs.”
“All the reductions should come out of the MBS,” said Lacker, who has opposed buying mortgage-backed securities since 2010.
“I just don’t think it’s appropriate for us to be channeling credit to one particular market,” added the central banker, who is not a voter on the FOMC this year or next.
…
who is not a voter on the FOMC this year or next.
He would tune a different song if he were a voter.
Why?
Because when you vote, you need to put your money where your mouth is. When you don’t need to vote, you can say things that are unpopular and a dissention from the rest of the group without needing to vote in that way.
When you don’t need to vote, you can say things that are unpopular and a dissention from the rest of the group without needing to vote in that way.
Like being in the minority party, it lets you explain how you could have fixed everything, if only you had been in power…
So conversely, being an FOMC member means you have to vote stupid, even if you know better?
It seems like FOMC members who are less aligned with K Street and Wall Street are more apt to question the wisdom of pouring billions and billions down the real estate rat hole. Perhaps they are trying to get on the right side of history before it is too late.
Will financial historians properly credit the role of 21st century central banking establishment in creating the historically epic Real Estate Bubble?
Isn’t the fear that of a HOUSING BUBBLE? Boom sounds relatively desirable.
P.S. Once top policymakers start nattering about such matters, they are no longer avoidable. It’s time to resume discussing the best way to foam the runway.
ft dot com
September 13, 2013 9:48 pm
Bank of England to hold talks as fears of housing boom rise
By Chris Giles and George Parker
The Bank of England will next week meet to discuss growing concerns about a new property bubble amid mounting pressure for the central bank to prevent another debt-fuelled housing boom.
The Financial Policy Committee will on Wednesday examine whether increasing signs of life in the housing market are creating another bubble, and what it can do to prevent such an outcome. It will discuss how it might stop a housing bubble inflating and the possible trigger points that would require the BoE to take action.
The FPC can use various tools to cool the housing market, such as investigating whether banks are taking risky lending decisions and forcing them to hold more capital against certain types of property loans.
Calls on policy makers to act have been mounting all week. Vince Cable worried in public on Wednesday about “serious housing inflationary pressures” in parts of the country.
The business secretary called on the government to think again about the Help to Buy scheme, which will provide state guarantees for mortgages offered to homebuyers without large deposits. “We don’t want a new housing bubble,” he said.
…
Isn’t Jack Lew a former Citigroup CEO? With Summers at the Fed, we could have a former Citigroup CEO in Treasury and a former Citigroup consultant at the Fed –booyah!
Summers Suspends Citigroup Ties While Considered for Fed
By Craig Torres & Dakin Campbell - Sep 14, 2013 11:14 AM PT
Former U.S. Treasury Secretary Lawrence Summers has suspended ties with Citigroup Inc. (C) while the White House considers nominating him to serve as the Federal Reserve’s next chairman, the company said.
“Mr. Summers has withdrawn from participation in all Citi events while he is under consideration to be chairman of the Federal Reserve,” Danielle Romero-Apsilos, a spokeswoman for the firm, said yesterday in an e-mailed statement.
Summers, a Harvard University Professor and former top economic adviser to President Barack Obama, was to give the keynote address on challenges to the global economy at a Citigroup research seminar Oct. 13, according to an invitation on the website for the firm, the third-biggest U.S. lender. The Washington event coincides with the annual meetings of the World Bank and the International Monetary Fund.
Citigroup hired Summers, 58, “for small private-bank client and institutional client meetings,” Romero-Apsilos said in an earlier e-mailed statement. He provided “insight on a broad range of topics including the global and domestic economy.”
…
Which prospect for the Fed Chair position would be most suited to keeping the recovery on track?
The Totally Unfair And Bitterly Uneven ‘Recovery,’ In 12 Charts
Posted: 09/13/2013 8:03 am EDT | Updated: 09/13/2013 2:33 pm
The financial crisis was hell for pretty much everybody, rich or poor. But the recovery that has followed has not been nearly as fair.
Wall Street, the wealthy and the powerful have done amazingly well since the crisis ended. Little of that has trickled down to everybody else, in what has been the most uneven recovery in at least several decades.
How about some charts to illustrate this infuriating result?
…
What I don’t get is, how can Democrats support Summers, given his anti-female and anti-Third-World-citizen stances?
P.S. He’s also a certifiable jackass.
September 14, 2013, 5:37 pm
3 Democrats Say They Will Oppose Summers for Fed
By JEREMY W. PETERS
Lawrence H. Summers’s prospects of becoming chairman of the Federal Reserve have become murkier since three key Democratic senators signaled in recent days that they would oppose his nomination.
Senator Jon Tester, Democrat of Montana and a member of the Banking Committee, said on Friday that he would vote against sending Mr. Summers’s nomination to the full Senate for a confirmation vote. Two of Mr. Tester’s fellow Democrats on the committee, Senators Jeff Merkley of Oregon and Sherrod Brown of Ohio, have also signaled through their aides that they would vote no.
Such resistance complicates matters for Mr. Summers because without the votes of those three Democrats, he would need Republican support on the Banking Committee, where Democrats have a three-vote majority. The panel holds the first vote on any nominee to lead the Fed.
It is not clear how the rest of the committee might vote. Senator Elizabeth Warren, Democrat of Massachusetts, is believed to be reluctant to support Mr. Summers but has not said publicly how she would vote.
President Obama is believed to prefer Mr. Summers, Treasury secretary in the Clinton administration and an Obama economic adviser, to succeed the current Fed chairman, Ben S. Bernanke, who is expected to step down at the end of January.
It is unusual for senators to voice opposition to a nomination before the White House has even submitted it to the Senate.
As skepticism grows among members of the president’s own party, the White House has made it clear to Democrats on Capitol Hill that Mr. Summers is Mr. Obama’s choice.
Republicans, too, are wary of Mr. Summers. Senator John Cornyn of Texas, the No. 2 Senate Republican, and Senator Pat Roberts of Kansas have both said that they would not vote for Mr. Summers. In August, Mr. Roberts said, “I wouldn’t want Larry Summers to mow my yard.”
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In August, Mr. Roberts said, “I wouldn’t want Larry Summers to mow my yard.”
+1 I wouldn’t trust Larry “The Bully” Summers for the time of day.
Never trust anyone who openly campaigns for unelected high office.
What is unclear: Is the Summers campaign for Fed Chair real, or is he just getting played by the PTB in order to set up another choice?
In race for Fed chair, Larry Summers reaches out to Elizabeth Warren
Jerome Favre/Bloomberg - Economist Lawrence “Larry” Summers sought a meeting with Sen. Elizabeth Warren.
By Ylan Q. Mui, Published: September 13
Lawrence H. Summers recently reached out to a key Democrat on the Senate banking committee as the controversy intensified over his potential nomination to lead the Federal Reserve, people familiar with the matter said.
Summers requested a meeting with Sen. Elizabeth Warren (D-Mass.) when both were in Massachusetts this summer, the people said. Warren has been a vocal critic of Summers’ s effort to deregulate the financial sector when he was Treasury secretary under President Bill Clinton. As a member of the committee that will vote first on the White House’s pick for Fed chairman, she could be a roadblock in advancing a possible Summers nomination.
Although the people familiar with the matter said the meeting never happened because of scheduling issues, the direct outreach underscores the behind-the-scenes push to install Summers in the top post at the central bank.
That effort faced a setback Friday when Sen. Jon Tester (D-Mont.), who also sits on the banking committee, announced he would not vote for Summers. Tester is expected to be joined by several other Democrats, including Sen. Sherrod Brown of Ohio and Sen. Jeff Merkley of Oregon. Losing the support of three or four Democrats would mean President Obama would need help from committee Republicans if he decided to pick Summers to lead the Fed.
“Senator Tester believes we need a consensus-builder to lead the Federal Reserve,” said Andrea Helling, Tester’s spokeswoman. “He’s concerned about Mr. Summers’s history of helping to deregulate financial markets. The senator thinks it is vital to have a chair who appreciates the important role small community lending institutions play in financial markets.”
Meanwhile, several people close to Janet L. Yellen, vice chairman of the Fed Board of Governors, said she has refused to take similar steps to plead her case. They said she was not involved in the letter this week signed by more than 400 economists urging her nomination as Fed chairman and has not reached out to Capitol Hill.
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Larry Summers vs. Congress, women, academia and everyone else
Congress, economists, women and black professors have all clashed with Larry Summers. Obama says it is just a ‘Washington exercise’.
Photo: Associated Press/ Summers
Thursday, August 22, 2013
NEW YORK, August 23, 2013 — Larry Summers is President Barack Obama’s likely nominee for Federal Reserve chairman, despite the disapproval of Congressional Democrats. Obama has dismissed the criticisms by Congress as a “Washington exercise”. Yet Summers’ reputation among economists, women and black professors warrant further examination. These groups like those on Capitol Hill believe that Summers’ record should disqualify him from running the Fed.
Congress
As former Secretary of the Treasury and Director of the National Economic Council, Summers seems capable of fulfilling the Fed’s dual mandate- to promote maximum employment and ensure price stability. Nevertheless, his reputation as a deregulator has mobilized Capitol Hill against him.
During the Clinton administration, as head of the Treasury, Summers actively supported the repeal of the Glass-Steagall Act and promoted the passage of the Commodity Futures Modernization Act. Both actions are claimed to exacerbate the 2008 financial crisis.
Glass-Steagall prohibited banks from taking part in speculative trading by separating investment banking and commercial banking. Once it was repealed commercial banks were able to invest in mortgage-backed securities and collateralized debt obligations. The Commodity Futures bill allowed financial derivatives to be traded without any oversight or regulation.
Summers has a Harvard Ph.D. in Economics, yet Republican Senator Pat Roberts said that he would not hire him “to mow my yard”.
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What do Third World folks think about the Summers Fed nomination prospects? And how about Democrats whose cause is every downtrodden soul on the planet? How do they feel about the famous Let Them Eat Pollution email Summers penned while president of the World Bank?
I guess it’s no big deal, or else this nomination wouldn’t be such a likely prospect.
…meant to say “Let Them Eat Pollution memo”…
Do Democrats agree that it is OK to dump pollution on Third World citizens?
There is a big propaganda push underway to humanize Summers.
Oops…wrong article. My hand slipped!
Wednesday, January 6, 2010
What Went Wrong With Summers?
Someone asked. After all, his uncles Kenneth Arrow and Paul Samuelson are two of the Greatest Econ Nobels of all time, and both were obsessed with things such as market failure, asymmetric information, and externalities. Instead of doing a Ph.D. at MIT, Summers crossed over to the dark side of Cambridge, studying under Martin Feldstein at Harvard, which had essentially shown Samuelson the door.
Have a look at Summers’ tribute to Milton Friedman penned in the NYT, in which Summers, in no uncertain terms, says Milton Friedman was a better economist than either of his uncles. This is a big deal, in part, because Samuelson and Friedman had a contentious, though respectful, rivalry. It’s also a big deal b/c Friedman was very wrong on many of the big issues — he argued that monetary policy alone caused/could have saved the Great Depression, that financial markets should be completely free, and that the Clinton tax increases would lead to a deep recession.
Kenneth Arrow and Paul Samuelson are not just two Nobel Prize winning economists — they are two of the most respected economists ever. Both were well-respected by nearly everyone — and they were politically liberal, technically-oriented, and smart. Both are responsible, in a big way, for economics being so technical today, only both were keen real-world observers in contrast to most economists today who can just do lots of math.
I can only imagine there must have been some raging debates at his family reunions, especially went larry went over to the dark side at the H. Larry’s relations with his uncles was strained at times — although both of his uncles are not the type of people who are difficult to get along with. I posted awhile back a quote of Samuelson in which, when asked about Summers, said “We’re not in contact.”
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He’s truly a humble and tender fellow, once you get to know him.
POLITICS
September 13, 2013, 7:30 p.m. ET
Letters Show Little-Known Side of Summers
Correspondence With Uncle, a Nobel Economist, Reveals Flashes of Humility and Tenderness
By JON HILSENRATH
DURHAM, N.C.—A few days after Lawrence Summers was forced out of the presidency of Harvard University in February 2006, he got an emotional, typed letter of consolation from his uncle.
“I grieve for you,” Nobel Prize-winning economist Paul Samuelson wrote to his nephew, who had clashed with the faculty and caused a storm by making impolitic remarks about women in science.
“Mob psychology can be much the same on college campuses as elsewhere,” Mr. Samuelson said. He counseled his nephew to avoid bitterness.
“I am mindful of negative aspects of grudges and of acting rashly in anger,” Mr. Summers replied several weeks later.
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Do Democrats agree that women make inferior scientists?
Why Larry Summers lost the presidency of Harvard
March 11, 2012 Cathy O’Neil, mathbabe
Some people still think Larry Summers got fired from being the president of Harvard because of the ridiculous comments he made about women in math (see my post about this here) or because of the comments he made about Cornel West. Actually, the truth is something worse, and for which he should actually be in jail. It’s also something that makes Harvard look bad, so maybe that’s why it’s less known.
The subtitle of this post is: Why Larry Summers shouldn’t be made head of the World Bank.
I was inspired to write this by being disgusted at continued rumors that he could get yet another prestigious job. It’s like this guy can’t fail spectacularly enough! Let’s give him another chance!
Let’s set the record straight: Summers was directly involved with defrauding the U.S. Government (see below) and Russia. He admitted to not understand conflict of interest issues (see below). It is particularly appalling, knowing these things, that he would be considered for the World Bank head, which presumably requires nuanced understanding of such issues.
I’m using this article, entitled “How Harvard Lost Russia,” and written in 2006 in Institutional Insider (II), as a reference. More on that article and how it led to getting Summers fired below. And by the way, I’m not claiming this story is completely unkown: see this wikipedia article for a quick overview, for example, in addition to the II article. I just think it needs reviving at this crucial moment, before Summers gets more toys to play with.
Shleifer
So why did Summers lose his job at Harvard? It was because of his protecting a buddy, a fellow economist at Harvard named Andrei Shleifer.
Andrei Shleifer managed to get put in charge of helping Russia privatize stuff in the mid 1990′s. His mission was to make things more useful and transparent to the infant capitalist system. Through his wife and friends, Shleifer instead orchestrated a boondoggle on Russia. He invested money through his wife and helped his friend Jonathan Hay and his lover and friends invest theirs, and set up the very first mutual fund as well as thwarting the efforts of other people to set up their own funds. All of these things were strictly against the conflict of interest policy they were working under.
Shleifer got in trouble, and the U.S Government sued and won against Harvard and Shleifer. From the article:
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Whatever happened to all the Dumbocrat apologists who used to post here? It’s not much fun to continually drop baited hooks into the water and never get a single bite.
Aside from his having offended entire categories of traditional Democrat constituencies, including women, blacks, and Third-world citizens, is there any reason for Democrats to oppose a Summers Fed Chair nomination?
Amanda Terkel
Larry Summers Clashed With African-American Scholars At Harvard
Posted: 08/06/2013 12:20 pm EDT | Updated: 08/06/2013 4:52 pm EDT
Cornel West left Harvard University after a run-in with then-president Larry Summers. (FREDERIC J. BROWN/AFP/Getty Images)
WASHINGTON — As a top contender to become the next Federal Reserve chairman, economist Larry Summers has reemerged for scrutiny for his time as Harvard University president. In particular, critics have pointed to his controversial comments about women and their ability — or lack thereof — to succeed in math and science. A couple of months later, the Harvard faculty delivered him a resounding vote of no confidence.
But even before those instances, Summers had clashed with another group at Harvard: the professors in the Department of African and African American Studies, which was revitalized under the university’s previous president and eventually lost two of its biggest stars, including Cornel West, during Summers’ term from 2001 to 2006.
“To put it bluntly, Summers has always struck me as a legendary gangster with a high IQ, in service of the well-to-do. That was my experience the first time I ever encountered him in his office,” West told The Huffington Post. “What’s interesting is I’ve noticed in a number of the newspaper pieces, they make more of his comment about women than they do his relation to black folk at Harvard. As you know, it really started with black folks.”
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Democrats harden opposition against Summers for U.S. Fed
Larry Summers, U.S. National Economic Council Director, gestures as he speaks about the global economic power shift away from the developed nations of the West and towards the newly industrialized nations of the East and South, at the 2010 meeting of the Wall Street Journal CEO Council in Washington November 15, 2010. REUTERS/Hyungwon Kang
By Alister Bull and Rachelle Younglai
WASHINGTON | Fri Sep 13, 2013 6:49pm EDT
(Reuters) - Four Democrats on the Senate Banking Committee are now expected to vote “no” if President Barack Obama nominates former economics adviser Lawrence Summers to be the next chair of the Federal Reserve, complicating one of the most vital decisions of his second term.
Jon Tester on Friday became the latest member to publicly announce his opposition, taking to three the number of senators on the committee who are known to be against Summers, while a fourth, Elizabeth Warren, is also expected to be a “no” vote.
“Senator Tester believes we need a consensus builder to lead the Federal Reserve. He’s concerned about Mr. Summers’ history of helping to deregulate financial markets,” said Andrea Helling, spokeswoman for the Montana Democrat.
Summers is widely thought to be Obama’s preferred choice to replace Fed Chairman Ben Bernanke when his term ends in January. The White House said on Friday that the president had not yet made a decision.
Obama’s impending decision on who should lead the U.S. central bank has sparked a highly unusual and vitriolic public debate over a position that in the past generated little interest beyond Wall Street and academia.
Fed Vice Chair Janet Yellen is also a candidate for the job.
Twenty Senate Democrats had already signed a letter urging Obama to nominate Yellen, although Tester was not among them. Yellen would be the first-ever woman to lead the U.S. central bank, if nominated and confirmed.
Other Democrats are unhappy with Summers, who served as Treasury secretary under President Bill Clinton, because of his backing for banking deregulation in the 1990s, which they blame for sowing the seeds of the 2007-2009 financial crisis.
The financial crisis led to a massive taxpayer bailout of Wall Street that continues to anger many ordinary Americans and could be another issue for Summers. He has close ties to the financial industry, where he is a highly paid consultant.
Tester implicitly nodded to Summers’ closeness to Wall Street, rather than Main Street, as another reason for not wanting him to lead the Fed.
“The senator thinks it is vital to have a chair who appreciates the important role small community lending institutions play in financial markets,” his office said.
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Is this all merely a ploy to make it easy to appoint Yellen?
Federal Reserve
Summers as Fed chief is a ‘black swan’ event, analysts warn
Published: Thursday, 29 Aug 2013 | 1:09 AM ET
By: Katie Holliday | Writer for CNBC.com
Speculation that Larry Summers is the favored candidate to take over Ben Bernanke as Fed chief has resurfaced in recent weeks, prompting a strong backlash from some industry watchers, with one going as far as labeling his potential appointment as a “black swan” event.
“There is a lot to be said that the next Fed chair is going to be picking up a surgery in the middle of surgery, think of it that way—that’s very difficult to do,” Jack Bouroudjian, CEO of Bull and Bear Partners, told CNBC, referring to the difference between Summers and Bernanke policies.
Summers is seen as a greater hawk between the two, which analysts say could mean the rapid unwinding of the massive U.S. monetary stimulus that has supported the economy.
“That could be the black swan that people aren’t expecting,” Bouroudjian said.
The choice of the successor to Bernanke, who is expected to step down in January when his term expires, has come down to a two-horse race between Summers, former Treasury Secretary in the Clinton administration, and Fed Vice Chair Janet Yellen, who up until a few weeks ago appeared to be the firm favorite.
(Read more: Wall Street wants Yellen, not Summers as next Fed chief)
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San Diego home prices are shooting up like it’s 2006! Here is the breakdown of August 2013 median percentage changes over a year earlier:
Central San Diego +21.0%
East County +22.5%
North County Inland +18.1%
North County Coast +20.9%
South County +15.0%
SAN DIEGO COUNTY +20.2%
Meanwhile unemployment remained at an elevated level of 7.8% as of July 2013, and the interest rate spike since May 2013 has reduced the amount of purchase proceeds (principal) that could be financed out of the same monthly mortgage payment on the order of 15%.
Hopefully the all-cash investor brigade can keep levitating San Diego home prices into the stratosphere, as end-user demand is toast.
I think the unemployment rate in San Diego around 2001 or 2002 must have been 3%. So being bubbly again at 7.8% says a lot. It says the bubble burst will be brutally painful for those buying at the top.
With San Diego County unemployment at 7.8% and increasing, it’s rather amazing that home prices are also increasing at over a 20% annual rate in most parts of the County.
Unemployment rate rises to 7.8 percent
By Jonathan Horn
9:52 a.m. Aug. 16, 2013
Updated 3:07 p.m.
Job seekers at a job fair hosted by the North County Career Center and the City of Carlsbad in Carlsbad in April. Job seekers at a job fair hosted by the North County Career Center and the City of Carlsbad in Carlsbad in April. — Eduardo Contreras
July is traditionally the year’s worst time for the unemployment rate, and last month was no exception.
San Diego County’s jobless rate jumped to 7.8 percent in July, as the region lost a net 10,900 nonfarm payroll jobs.
The state Employment Development Department reported Friday that the county’s unemployment rate rose from a revised 7.4 percent in June and 6.8 percent in May, which was the lowest since October 2008. The biggest job cut in July came from local government education, which reduced its workers by 11,500, mostly service employees for the summer break.
The data are not adjusted for seasonal factors, so the summer school-related reduction has a larger effect on the overall jobless figures. The job market is further squeezed in July by the influx of college graduates and high school students looking for work.
“There’s a lot of seasonality involved because the unemployment rate did surge,” said Alan Gin, economist at the University of San Diego.
But seasonality alone can’t account for an overall slowdown in the local job market. Between July 2012 and July 2013, county employers added a net 19,900 people to their payrolls, a growth rate of 1.6 percent. Consider that from July 2011 to July 2012, employers added 35,100 workers, which was a 2.9 percent clip. Annual growth is not affected by seasonality since it encompasses all times of the year.
“It’s disappointing,” Gin said, noting a solid annual number is around 25,000 new jobs. “It shows that the job growth is slowing. It could be that last year we were just rebounding off of such a terrible number in 2011 that you’re going to get good year-over-year comparisons.”
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I suppose it depends on who are the unemployed. If it’s lucky duckies who are bearing the brunt of it while households with two professional incomes are not, then that might explain the contradiction. That and the ever present fear of “being priced out forever”.
“I suppose it depends on who are the unemployed.”
However you slice or dice the numbers, 7.8% is a recession-level of unemployment, which is entirely inconsistent with home prices rising at a 20%+ a year. All the ingredients are in place for another leg down in San Diego home prices, with foreign investors set to bear the brunt of the losses.
Got popcorn?
Yeah my only conclusion is there will be a lot of fools thinking they’ve been had. They will blame the banks for lending to them.
And the banks, in turn, will retort, “Nobody could have seen it coming!”
The unemployment rate is far less applicable than the jobs/housing ratio.
The unemployment rate is far less applicable than the jobs/housing ratio.
The jobs/housing ratio is far less applicable than the supply/demand issue.
And remember, demand is at 14 year lows and falling and there are tens of millions of excess empty houses in the US.
Posted: 12:29 p.m. Saturday, Sept. 14, 2013
Obama to use Lehman anniversary to cite progress
By JIM KUHNHENN
The Associated Press
WASHINGTON —
President Barack Obama is marking the fifth anniversary of the Lehman Brothers collapse by trying to lay claim to an economic turnaround and warning Republicans against moves that he contends would risk a backslide.
His message to the GOP: don’t oppose raising the nation’s debt limit, don’t threaten to close down the government in a budget fight, and don’t push to delay the health care law or starve it of federal money.
Blackstone Group
From Wikipedia, the free encyclopedia
After subprime mortgage crisis, Blackstone Group LP has bought more than $5.5 billion single-family homes for rent and then sell when the prices rise
Blackstone also ventured into other businesses, most notably investment management. In 1987 Blackstone entered into a 50–50 partnership with the founders of BlackRock, Larry Fink and Ralph Schlosstein. The two founders, who had previously run the mortgage-backed securities divisions at First Boston and Lehman Brothers Kuhn Loeb, respectively, initially joined Blackstone to manage an investment fund and provide advice to financial institutions.
Prominent investment banker Roger C. Altman, another Lehman veteran, left his position as a managing director of Shearson Lehman Brothers to join Peterson and Schwarzman at Blackstone in 1987. In 1992 after playing a role in the firm’s growth, Altman would leave Blackstone to join the Clinton Administration as Deputy Treasury Secretary. After leaving politics in 1996, Altman would found a boutique investment banking and private equity firm, Evercore Partners.[32][33
Battle on over plan to seize mortgages
Kathleen Pender
Updated 12:21 pm, Saturday, July 21, 2012
Battle lines drawn
Mortgage Resolution was started last year by Gluckstern, a former money manager whose past credits include working for Warren Buffett, co-owning the New York Islanders hockey team, chairing liberal think tank the Democracy Alliance and raising money for President Obama.
Gluckstern says about 50 people have invested in his company, including former San Francisco mayor and Chronicle contributor Willie Brown and Don Putnam, founder of Grail Partners, a San Francisco investment bank. Phil Angelides, former California treasurer, was the firm’s executive chairman but severed his relationship in January.
The firm is working with investment banks Evercore Partners and Westwood Capital to find investors to front the money cities would need to pay for seized mortgages. The investors would be repaid when the mortgages were refinanced.
http://www.sfgate.com/business/networth/article/Battle-on-over-plan-to-seize-mortgages-3725036.php - 116k
Bilderberg Group Exposed
Added by Aaron on January 5, 2013
Here’s the list of attendees in the 2011 meeting
USA
Altman, Roger C., Chairman, Evercore Partners Inc.
http://anewworldsociety.ning.com/notes/Bilderberg_Group_Exposed - 68k
Your word is cow.
Cow
Cow
cow eieio
eeehhhh
Dag-nabit
The local police chief makes an even more extreme prediction for Zimmerman than I did:
Florida Police Chief Agrees, Zimmerman’s Another “Sandy Hook, Aurora” Waiting to Happen
http://www.slate.com/blogs/the_slatest/2013/09/13/george_zimmerman_steve_bracknell_lake_mary_police_chief_suggests_zimmerman.html
I was commenting recently about how some south Texas towns are run more like Mexico. Here’s an article from a little town I know well:
‘The FBI was so unnerved by one family’s seemingly pervasive control of a small South Texas border town that agents began bringing a second unit when they conducted interviews so that the backup agents could watch their vehicle, the lead case agent testified Wednesday in McAllen.’
‘But that didn’t stop Jose Guadalupe Vela Jr., one of the investigation’s targets, from standing outside the door of the school district office where potential witnesses to his reign were being interviewed, FBI special agent Ricardo Ale said. Vela, a maintenance and transportation supervisor for the Progreso Independent School District, and his sons, Progreso Mayor Omar Vela and Michael Vela, president of the school district’s board of trustees, were arrested Aug. 28, on public corruption charges. Prosecutors allege the Velas used their control of the city and school district to create a “pay-to-play” scheme that lined their pockets with bribes and kickbacks. Progreso is an isolated enclave of about 5,500 perched on the Texas-Mexico border.’
‘The FBI began its investigation, dubbed “Legal Progress,” in 2005, and soon found a construction company, architectural firm, supply outfit and local attorney who all admitted to getting contracts with the city or school district by giving bribes and kickbacks to the Velas.’
‘The local attorney gave eight Buchanan’s Scotch gift boxes to Jose Vela in 2008 to get the contract representing the school district. Jose Vela told the lawyer, “It’s the barter system. … You know, my back is itching. Scratch it,” according to the indictment.’
‘Jose Vela was the kingmaker when it came to the school board. He would approach people to run for seats and the Velas would cover the campaign advertising costs, Ale said. Those who didn’t go along with Jose Vela’s wishes saw family members fired or demoted.’
‘In one instance, a school board member who ran afoul of Jose Vela was forced off the road by one of Jose Vela’s subordinates in the transportation department and hit, Ale said. The attacker made it clear the message came from Jose Vela.’
http://www.khou.com/news/national/222397151.html
‘The FBI began its investigation, dubbed “Legal Progress,” in 2005, and soon found a construction company, architectural firm, supply outfit and local attorney who all admitted to getting contracts with the city or school district by giving bribes and kickbacks to the Velas.’
Cheap amateurs.
Suze Orman says to watch your wallet and walk as salesmen are invoking the worn out sense of urgency ploy.
Housing Analyst says to watch your wallet and rent for half the monthly cost of buying.
I got a great deal on furniture today. Near new and one is brand new (still in the box). All matching bar stools. About 1/3 at a minimum compared to what I would have paid for similar quality brand new.
No urgency from this perspective. Just adding on discount near new stuff when people are moving. That’s the way to go. I owe my Admin assistant a couple of bags of oranges (she’s into health and has a family so they all can eat them) - for giving me leads on low cost things to furnish my place.
Funny thing is I thought OC was supposed to be ostentatious. Maybe over the hill with ocean view it is that way. But on this side of the Laguna hills people drive normal cars. In L.A. where I was there were noticebly high end cars in parking lots at malls and businesses.
Thank goodness the people around me pay $500,000 for a stucco box and don’t care about their car
-18 +12