June 28, 2014

Bits Bucket for June 28, 2014

Post off-topic ideas, links, and Craigslist finds here.

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Comment by Whac-A-Bubble™
2014-06-28 07:11:30

Do you know what ticks me off? It’s articles that bemoan the plight of highly-leveraged speculators, also known as US home owners, who gambled their life savings using extreme leverage to purchase real estate during the course of a historic mania, only to soon find themselves hopelessly underwater on their speculative investments.

Nobody put guns to their heads and forced them to sign that stack of paperwork necessary to close on an undiversified, highly-leveraged, speculative real estate investment.

Comment by WalmartShrimpRage
2014-06-28 07:29:00

Do you know what ticks me off?

If I had to pick just one though, this Saturday morning it would be HGTV. I think this is more responsible for ruining people’s lives through greed, covetousness and lies than any 10 bankers.

Watching HGTV is a sign of mental illness.

Comment by Skroodle
2014-06-28 09:41:50

Are you kidding?

I love watching that Canadian show where they spend $100k to redo 75 year old houses and discover collapsed swear pipes and asbestos everywhere.


Comment by WalmartShrimpRage
2014-06-28 09:48:05

HGTV sells lies and even if there was one show where they showed disaster, it is outnumbered 100 to 1 selling the lies and covetousness sponsored by NAR.

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Comment by sleepless_near_seattle
2014-06-28 10:26:05

Have to agree w WalmartFavelaPicker on this one. I have to shower after coming w/in 10 channels of HGTV.

Comment by Guillotine Renovator
2014-06-28 12:19:29

The whole channel is nothing but one giant display of fake wealth. Disgusting.

Comment by Whac-A-Bubble™
2014-06-28 13:52:48

“…one giant display of fake wealth.”

Are you denying the reality of home equity wealth effects?

Comment by inchbyinch
2014-06-28 07:44:38

I second your angst on homemoaners. Many homes we offered hard earned money for, got sold to people who offered insane amounts, used a loan, and then defaulted, living free. We use to follow foreclosure radar and we would see the buyer was in the rears months after the coe.

Reminds me of our concern for taking out CEA EQ insurance. Will those luxury car owners who are relying on FEMA win their bet? Why have a deductible (they subtract it out of a large settlement) if FEMA will give you a grant.

The govt rewards the inverse of morals and doing the right thing. It sucks. I’m going over to the “dark side”, I swear. lol

Comment by inchbyinch
2014-06-28 07:53:56

We won the multiple bidding war on this house, granted we paid cash, but we closed $32K below the highest offer. Most of our competition were 1st time buyers on the teet of the UHS or flippers. They were told to pay way above list, and the fools listened.

OT, but listing agents always brag they “sold the house”. BS, the buyer’s agent does all the work. Period.

Comment by iftheshoefits
2014-06-28 08:00:23

It seems as if the only thing buyer’s agents are good for any more is getting a buyer to overpay for a house. Every one I’ve had contact with at all in the past few years is working that angle from the get-go.

Another way of stating the above is to say that buyer’s agents are useless to sane buyers any more.

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Comment by Raymond K Hessel
2014-06-28 08:17:33

“Buyers agent” is a myth. Both realtors have a vested interest in gouging the buyer since they stand to gain a percentage on the highest price the buyer will bear. Some would call that unethical collusion or conflict of interest.

Comment by Whac-A-Bubble™
2014-06-28 08:34:21

Steven Levitt’s (Freakonomist) research showed that Chicago area used home sellers listed their clients’ homes at lower prices and sold them more quickly than the prices for which they sold their own homes over longer periods. It appears that used home sellers prefer a quick sale with less time and headache for their clients; when it comes to their own homes, they are more willing to hold out for top dollar.

No surprises here, though quite interesting!

Comment by iftheshoefits
2014-06-28 09:02:37

“Buyers agent is a myth”

I can still remember a time when it wasn’t that way, but not now. For us, the less agents in the mix, the better.

You want to be my buyer’s agent? Dredge me up some interesting off-list stuff I wouldn’t likely find on my own, then help me drive the price as low the seller can bear. Otherwise just get out of the way.

Comment by sleepless_near_seattle
2014-06-28 10:34:24

Dredge me up some interesting off-list stuff I wouldn’t likely find on my own, then help me drive the price as low the seller can bear. Otherwise just get out of the way.

+1, same mindset here. If the MLS is ever opened up fully (or abolished), it’ll be the same for selling as well.

Comment by Combotechie
2014-06-28 08:05:47

“OT, but listing agents always brag they “sold the house”. BS, the buyer’s agent does all the work. Period.”

So, how does listing a house work? If I want to list my house who do I call, who do I talk to?

If whomever I list my house with gets a big, fat commission without doing all the work then I would think the guy running the show at the broker’s end would be the one guy that would be accepting all the listings.

Is this how it is?

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Comment by inchbyinch
2014-06-28 10:19:55

We used an online MLS listing service for a couple grand or less, and used an Attorney to confirm all was kosher. We paid the 3% buyer’s agent. Although the big broker’s boycotted us, a small broker w/ a 50% down client did not have an issue.

People who are willing to get involved save big on listing their home. Our net savings was over $30K ,iirc.

There was a time the buyer’s agent gave a hoot. The industry attracts bottom-feeders.

Comment by sleepless_near_seattle
2014-06-28 10:49:33

There was a time the buyer’s agent gave a hoot. The industry attracts bottom-feeders.

Buyer’s agents were rendered useless by legions of dumb azzes willing to overbid on already overpriced shacks. “Victims” of the very marketing the REIC is known for.

Comment by iftheshoefits
2014-06-28 16:50:13

“Although the big broker’s boycotted us, a small broker w/ a 50% down client did not have an issue. ”

It only takes one live buyer on the line to make a deal, and as you seem to have found, if you’re priced at the market, buyers are usually not that hard to find.

The UHS that wouldn’t deal with you? Their loss (more importantly, their client’s loss), not yours.

Comment by Housing Analyst
2014-06-28 12:03:12

“We won the multiple bidding war on this house,”

No. You lost. That’s what you get when you pay a 250% premium.

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Comment by Guillotine Renovator
2014-06-28 12:23:31

“We won the multiple bidding war on this house…”

This is nothing to boast of, or even admit in my opinion. It says one thing: You overpaid in a speculators market due to emotion.

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Comment by Mr. Banker
2014-06-28 07:55:27

“I’m going over to the “dark side”, I swear.”

Welcome aboard. The Dark Side is where it’s at.

Comment by Bill, just South of Irvine, CA
2014-06-28 08:09:29

I agree W-A-B.

I laugh at those dumb suckers. I haven’t heard of housing as an investment before the year 2000. But it obviously is a belief by most of the buyers since then. Even after the bubble burst in 2007 some of the same cities that suffered the most, like Phoenix, have had housing manias again. What a bunch of jackasses.

Comment by Whac-A-Bubble™
2014-06-28 08:11:57

“I haven’t heard of housing as an investment before the year 2000. But it obviously is a belief by most of the buyers since then.”

Weirdest part is the collective amnesia that leads the masses to pretend things were always this way.

They sure weren’t this way when I was starting out as a young adult!

Comment by sleepless_near_seattle
2014-06-28 10:42:52

A colleague told me this week that his bro in law was moving his family in with his mother, renting out their current house, and saving a year of mortgage payments to buy another house, which they will then occupy.

Stuff like this is indeed a recent phenomenon. I liken it to mutual funds that used to be somewhat fringe as an investment vehicle. Far too many folks are becoming landlords, the difference being the maintenance and management burden.

Comment by Guillotine Renovator
2014-06-28 14:22:10

“I haven’t heard of housing as an investment before the year 2000.”

Prior to 2000, I had also never heard of houses listed for sale on the mls for 5+ years. Seriously, who ARE these people who list their houses for half a decade?

Comment by sleepless_near_seattle
2014-06-28 16:16:47

The equivalent of Zillow’s “make me move” crowd?

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Comment by iftheshoefits
2014-06-28 16:56:03

Who are they? Desperate people stuck in a stupid ‘investment’, over-leveraged, with no way out at anything close to actual market prices. (Of course you knew that.)

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Comment by Lenderoflastresort
2014-06-28 15:39:35

A lot of those people have since recovered in the equities bubble, I’d guess.

Comment by WalmartShrimpRage
2014-06-28 07:11:39

Saturday AM, shills are sleeping it off.

There will be no buyers today. They are too busy making potato salad.

Comment by Raymond K Hessel
2014-06-28 07:13:15

A plutocrat to the .01%: “I see pitchforks coming.”


Comment by Whac-A-Bubble™
2014-06-28 07:35:32

But the problem isn’t that we have inequality. Some inequality is intrinsic to any high-functioning capitalist economy. The problem is that inequality is at historically high levels and getting worse every day. Our country is rapidly becoming less a capitalist society and more a feudal society. Unless our policies change dramatically, the middle class will disappear, and we will be back to late 18th-century France. Before the revolution.

Having recently finished reading Les Miserables, I’m not buying it. Today’s .01% are different than the French royalty in a number of ways. For one, in many cases they have a legitimate claim to their wealth through having either run a company or produced some new idea that improved the lives of millions. Secondly, unlike the French royalty, which was the visible face of oppression, in many cases the .01% live quiet lives either out of view or inconspicuously in plain view of main stream society.

In short, the social tensions which gave rise to the French Revolution don’t seem apparent in the context of today’s societal wealth gap.

Comment by scdave
2014-06-28 07:47:52

don’t seem apparent in the context of today’s societal wealth gap ?

I would agree with that, however, the societal effect is the same…Honestly, I am worried it cannot be fixed short of a New Deal WPA effort…Technology, Robotics, Outsourcing & Offshoring have came home to roost…

Comment by WalmartShrimpRage
2014-06-28 08:27:04

In short, the social tensions which gave rise to the French Revolution don’t seem apparent in the context of today’s societal wealth gap.

Did the French Aristocracy have the socialist state of the FSA protecting them? How many do not work but are being paid by the government? Welfare, disability, Section 8, Bamacare, etc.

(And yes, i am also against corporate welfare, farm subsidies, MIC subsidies, crony sweetheart public/private partnerships and the rest also).

Comment by Whac-A-Bubble™
2014-06-28 08:35:37

“Did the French Aristocracy have the socialist state of the FSA protecting them?”

No, which is another reason I argue that it is different this time.

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Comment by Whac-A-Bubble™
2014-06-28 08:37:56

P.S. The loser in the status quo still appears to be the middle class, as those in the lower rung of the socio-economic ladder qualify for FSA stuff, and those in the upper rung get lower marginal tax rates relative to what the middle pays on the marginal dollar of income.

Comment by Neuromance
2014-06-28 20:59:54

I’ll tell you what the big difference is - until people start going hungry, we won’t have that kind of pitchforky social unrest.

Now, people seeing their children doing worse than themselves might create some angst, but it takes not having the basics - food, clothing, shelter - that turns people into the streets.

Inequality will make people more and more cynical and will harm people’s faith in leaders. Seeing government and the central bank continuously pushing prices up for them and enriching the cronies in the process might create a slow negative feedback loop.

Comment by Whac-A-Bubble™
2014-06-28 22:30:26

That’s a big one. In Les Miserables, Gavroche Thénardier and his homeless friends barely can find bread to fill their stomachs. Thanks to USDA, poor folks in American can at least fill up on unhealthy food that makes them fat and happy.

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Comment by scdave
2014-06-28 07:59:31

From the essay;

What a great idea. My suggestion to you is: Let’s do it all over again. We’ve got to try something. These idiotic trickle-down policies are destroying my customer base. And yours too.

Paging Rio………..

Comment by WalmartShrimpRage
2014-06-28 20:54:37

He can’t hear the page
In a blind drunken rage

Also by now he would only answer to Lola

Comment by Whac-A-Bubble™
2014-06-28 07:14:36

Do renters qualify for housing bailouts, or only homemoaners?

Comment by Whac-A-Bubble™
2014-06-28 07:17:19

Wednesday, May 14, 2014 04:45 AM PST
This man made millions suffer: Tim Geithner’s sorry legacy on housing
Forget the book tour designed to polish his legacy. Tim Geithner’s record on housing will forever live in infamy
David Dayen

As Salon pointed out yesterday, Bush-era economist and Romney advisor Glenn Hubbard claims former Treasury secretary Timothy Geithner lied in his book “Stress Test,” when describing a conversation from 2012 about Hubbard supporting tax increases. But while the he said/she said doesn’t interest me, a separate, throwaway statement by Hubbard does matter — in fact, it tells you plenty about Geithner and his policy preferences during Obama’s first term.

“I saw some of the excerpts about housing and I must say I split my side in laughter because Tim Geithner personally and actively opposed mortgage refinancing, constantly,” Hubbard told Politico. “And now he’s claiming this would be a great idea in the country.”

We aren’t obligated to believe Hubbard here, especially because his recollection of the tax conversation is probably misleading, if not untrue. And unfortunately, Hubbard declined to elaborate when I asked him for more detail. However, we have a ton of public information available to inform the debate over Geithner and housing.

When Hubbard talks about refinancing, he’s being very specific. He co-wrote a plan in 2008 endorsing mass refinancing through Fannie Mae and Freddie Mac, as a economic stimulus, getting homeowners reduced monthly payments. This was one of the major fiscal policy tools available to the Administration that didn’t require additional spending — the Federal Reserve had lowered interest rates, it was merely up to Fannie and Freddie to take advantage of it. But in the early years of the crisis, the White House did little. Brad DeLong backs up Hubbard on this point, saying he never got a satisfactory answer for the lack of mass refinancing.

Comment by Whac-A-Bubble™
2014-06-28 07:20:31

Business Day
Lew Unveils Small Steps to Augment Loan Modification Program
JUNE 26, 2014
Jacob J. Lew, center, the Treasury secretary, met with homeowners, housing counselors and counseling clients at the Greater Washington Urban League in Washington on Thursday. Credit Daniel Rosenbaum for The New York Times

The Obama administration will take further steps to ease foreclosures, rising rents and scarce mortgages, Jacob J. Lew, the Treasury secretary, said on Thursday at a conference observing the fifth anniversary of Making Home Affordable, a suite of federal programs aimed at helping homeowners after the financial crisis.

Mr. Lew’s announcement came on the heels of a new wave of criticism — occasioned by the publication of a memoir by his predecessor, Timothy F. Geithner — that Treasury’s efforts to help homeowners were inadequate. (Salon’s take: “This man made millions suffer: Tim Geithner’s sorry legacy on housing.”)

Of the $46 billion in federal bailout money reserved for homeowners after the crisis, about $38 billion has been obligated but only $12.4 billion has been paid out.

The administration has defended its cornerstone program, a loan modification program known as HAMP, which has resulted in more than 1.3 million loan restructurings.

The program helped far fewer people than anticipated, but officials say that it pushed lenders to behave better in general.

“As we know, our initiatives have not been a silver bullet,” Mr. Lew said. “But HAMP and our other programs cannot be judged only on what they have done directly for homeowners. Treasury’s housing assistance programs have become a model for the broader housing sector.”

Comment by Combotechie
2014-06-28 07:21:04

For inquiring minds …

Here’s how GDP relates to multiplying the value of the money stock by the velocity of the money stock:


Comment by Combotechie
2014-06-28 07:49:12

Concerning the money stock, Wikipedia says (in part):

“… if the velocity of money, i.e., the ratio between nominal GDP and money supply changes, an increase in the money supply could have either no effect, an exaggerated effect, or an unpredictable effect on the growth of nominal GDP.”

Which means even if the money stock is made to expand the effect of a contraction of the velocity of money can more than cancel out the effects of the expansion and instead of getting a growing GDP you will end up with a shrinking GDP.

Comment by Combotechie
2014-06-28 07:51:52
Comment by Combotechie
2014-06-28 07:53:17

And here’s the money velocity …


Comment by Whac-A-Bubble™
2014-06-28 08:09:59

Is the monetary velocity a cause or an effect of real economic conditions? For instance, a massive slowing of MV shown on the graphs you keep linking could be a consequence of policies adopted around the time of recessions to combat them (e.g. create more money, slow the velocity).

Comment by Whac-A-Bubble™
2014-06-28 08:06:16

So what you (your graph) are (is) saying is that for a given level of GDP, if the Fed creates massive electronic piles of new fiat at a historically unprecedented rate, then the velocity of the money stock will necessarily slow, as GDP = Stock * Velocity.

Is that your point?

Comment by Bill, just South of Irvine, CA
2014-06-28 08:11:19

The point always seems to be that keep printing, there will never be hyperinflation.

Comment by Combotechie
2014-06-28 08:14:06

“Is that your point?”

No, my point is the Fed can create a whole bunch of money but in order to do its wonders the money has to flow, it has to be spent.

If GDP tracks the supply of money multiplied by the flow of money then it’s not just the supply of the created money that goes into creating GDP, it’s also the flow of the created money.

If the created money goes to the top of the economic food chain and stays there then everything below top of the food chain starves.

It’s sort of the reverse of biological concept of the krill feeding the whales.

Comment by Combotechie
2014-06-28 08:28:30

If a magically created dollar has the same amount of buying power as an earned dollar (and it does) then all one has to do to prosper is to position himself at the point at where the magically created dollar is magically created.

He get the dollars without doing any work.

And (in theory) he will spend these dollars and these spent dollars will then trickle down to lower levels and circulate about and this circulating about will magically create lots of economic prosperity - lots of GDP.

However … if the guy who receives the magically created dollars decides to not spend his dollars then there is no trickle down to lower levels and thus there is little economic prosperity created and this will be reflected in the GDP numbers. And, IMO, this is what we are seeing.

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Comment by CA renter
2014-06-29 01:57:10

Totally agree with you on this, combo, and really appreciate your bringing this (huge drop in the velocity of money) to our attention.

Comment by WalmartShrimpRage
2014-06-28 08:31:25

But everyone is rich again, including the middle class. The stock market is at all time highs so people can now go out and spend spend spend. And houses are now full of wrequity once again. Mo Hummers, Mo Hummers, Mo Hummers.

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Comment by Whac-A-Bubble™
2014-06-28 08:41:55

“Mo Hummers”

Is this about cars, or something else?

Comment by WalmartShrimpRage
2014-06-28 09:50:46

I chose that word precisely and deliberately.

Comment by Whac-A-Bubble™
2014-06-28 09:53:48

I love double entendres!

Comment by Tarara Boomdea
2014-06-28 10:33:08

When we were selling our house in NY, one older woman realtor showed up in one of those behemoths. Her license plate was MSHUMMER. Cringe.

Comment by Whac-A-Bubble™
2014-06-28 08:40:32

“No, my point is the Fed can create a whole bunch of money but in order to do its wonders the money has to flow, it has to be spent.”


But if the money were spent at a constant rate and GDP remained constant, wouldn’t mo money result in a lower MV?

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Comment by Patrick
2014-06-28 19:34:52

More money slows velocity if the same quantum of spending occurs, and will not improve GDP if the created money goes into those eleven big banks to hold and improve their leverage, or to finance government past expenditures.

That’s QE for you. And big reasons why it hasn’t worked.

Comment by Whac-A-Bubble™
2014-06-28 22:32:55

Patrick — exactly my point…i.e. mo money and the same spending as before = slower MV.

Whether mo money is a symptom of desperate extremes to counteract a potential GD1 rerun is another discussion.

Comment by Patrick
2014-06-29 10:41:11

There is one very efficient way of widely dispersing money to increase GDP - thru the tax system.

Why is the Fed even involved ?

People who fail as badly as the Fed has are fired after less than a year. And they have been failing horribly for six years !

Thank you - I can answer my own question - but somebody had better start managing the economy better or there really will be problems counterfeiting will not smother.

Comment by phony scandals
2014-06-28 07:40:58

It’s another beautiful day in the North American Union.

First Lady Of Honduras To Tour South Texas Immigration Shelters

June 27, 2014 7:37 AM

MCALLEN, Texas (AP) — The first lady of Honduras is to tour South Texas immigration shelters to learn the plight of thousands of Hondurans who entered the United States illegally.

Ana Garcia de Hernandez already has met Thursday morning with McAllen Mayor Jim Darling. Starting Friday, she is scheduled to visit several Border Patrol stations in the Rio Grande Valley and plans to remain in the area through Saturday.

houston.cbslocal.com/…/ - 103k -

Comment by Guillotine Renovator
2014-06-28 12:39:41

She should be met with a bill for the cost of rounding them up as well as shipping them back. Instead she will stay at a 5 star hotel, and rub elbows with the American elites, while they ponder how to continue raping the serfs.

Comment by Whac-A-Bubble™
2014-06-28 07:43:07

Since we don’t own any real estate outright, I have hedged our household portfolio by investing in Vanguard REIT Index Fund Admiral Shares. With so many federal dollars getting poured into stimulating the real estate sector, why miss out?

Comment by Whac-A-Bubble™
2014-06-28 07:44:48

P.S. For a rough idea of how much I have invested, I could probably buy about five Detroit investment homes with the principle.

Comment by Ol'Bubba
2014-06-28 08:29:34

You have a whole five bucks invested?

I thought the minimum for the Vanguard REIT Index Admiral fund was ten grand.

Comment by Whac-A-Bubble™
2014-06-28 08:48:50

OK…I didn’t mean the Detroit investment homes that sell for $1 a piece. LOL!

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Comment by Guillotine Renovator
2014-06-28 12:42:14

Many are free, you just have to pay the taxes.

Comment by sleepless_near_seattle
2014-06-28 11:02:16

I could probably buy about five Detroit investment homes with the principle.

And you probably did! :-)

Comment by Whac-A-Bubble™
2014-06-28 07:59:37

Another thing I like about the Vanguard REIT: It has lots of investments in health care real estate, which may go up in value due to the ACA.

Buy what DC buys.

Comment by Bill, just South of Irvine, CA
2014-06-28 08:24:05

I agree on that ACA. The Republicans may win back the presidency and Congress but they will not kill the ACA.

Also my former staffing company used to be 80% into health care staffing. Then they bought a huge IT staffing company, so not so much into health care as a whole. But they will still gain from the growth in IT and health care.

Comment by Skroodle
2014-06-28 09:46:07

Ted Cruz’s head will asplode if the Republicans fail to overturn Obamacare.

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Comment by WalmartShrimpRage
2014-06-28 09:53:20

They don’t need to repeal anything, just get the presidency. Then they can executive order it out of existence. There’s always a silver lining.

Comment by Bill, just South of Irvine, CA
2014-06-28 08:20:34

I have less than $10k in my REIT, so I am in the investor’s shares version.

The advantages over home moanership are many:
1) I dollar cost average into the REIT. You cannot dollar cost average into a house.
2) My REIT will not be a slum. Your house is far more likely to go Detroit than the apartment properties, health care properties and commercial properties in a REIT.
3) My REIT does not hold me down geographically. I can take it whereever my job goes. And I move around southern California from job to job every three or four years.
4) If I put enough of my assets into my Vanguard REIT, the dividends can pay for my entire rent. But I already use my bond funds to pay my entire rent for my Phoenix apartment.
5) I don’t get a California renter’s tax credit. Years ago it was $60 per year. I’m not technically a Californian and the Franchise Tax Board does not know my rental address in California anyway ( it is fun being an anarchist in the nanny state). My dividends on my REIT amount to over $60 per year so far. I only have put $3800 into it since I started the fund last year. So yes I do have my deserved tax credit.

Comment by Blackhawk
2014-06-28 07:47:33

California: Pro-Business Latino Democrats Stopped Minimum Wage Hike
by William Bigelow 27 Jun 2014

Despite the fact that the pro-business Latino Caucus is comprised totally of Democrats, one of its members abstained from supporting the bill. Business groups were astonished to see the bill die in an Assembly labor committee, which was seen as dominated by the state’s unions.

The tipping point in the death of the $13-per-hour minimum wage bill was the abstention of Salinas Democrat Assemblyman Luis Alejo, who had written the 2013 bill raising the state’s minimum wage to $9 next week and $10 by 2016. He was joined by one other Democrat.

Alejo’s bill, which engendered a compromise among the governor, business groups, and organized labor, took three years to pass. Alejo noted that he had given his word on the compromise, and he would not break it to support the new minimum wage bill, Senate Bill 935, authored by San Francisco Democrat Mark Leno. Alejo said the new bill would violate the old one, adding, “When you’re trying to negotiate a deal and reach consensus, you have to keep your word.”

Many of the Latinos in the caucus come from small towns where small businesses could be damaged by another minimum wage hike. Alejo explained that the Latino community is not monolithic, saying, “I think Latino legislators bring a lot to the table. We have a diverse range within us. We need to strike a good balance for improving conditions for working people and helping grow jobs and business.”

Ken Devore, the legislative director for the California chapter of the National Federation of Independent Business, acknowledged his surprise at the death of the wage hike bill. He said, “We were stunned.” He added that the growing power of the Latino community was noteworthy, asserting that they can throw their votes to either political party, concluding, “If (Latinos and other moderates) understood the power they had, they would direct the policy of the state.”


Hmm. Breaking from the party’s propaganda? Are they recognizing that if workers cannot generate enough income for the business, then the business will shed those unproductive workers.

Comment by Salinasron
2014-06-28 08:14:23

I love it. Get the minimum wage high enough and all the old retires with Obama care will take the jobs because of zero interest on savings and bonds. The illegals will be drawing welfare along with the recent graduates. Gee, back to square one. How about some real jobs.

Perhaps all this crap with immigration is about bringing cheap labor into the country and then the repatriation of American factories from Mexico and China.

Comment by aNYCdj
2014-06-28 08:45:12

My crazy idea was always bring all that overseas money home No 35% tax IF you spend it in America on Americans….no stock buy backs no buying other companies,unless you INCREASE employment no pay raises or bonuses unless every employee even the janitor gets the same percentage….

So it wont be spent on H1B illegals or anything not American

Comment by Skroodle
2014-06-28 09:47:55

Old retirees qualify for Medicare, not Obamacare.

Comment by Whac-A-Bubble™
2014-06-28 08:31:03

“Pro-Business Latino Democrats Stopped Minimum Wage Hike”

It’s good to know that at least some Californians are worried about avoiding further decreases in the already-dismal labor force participation rate.

Comment by phony scandals
2014-06-28 08:26:22

Border Patrol Reschedules Flights to California

SAN DIEGO — Jun 27, 2014, 6:41 PM ET
By JULIE WATSON Associated Press

The Border Patrol announced Friday that it was going forward with its plans to fly Central American migrants from the Rio Grande Valley to Southern California and two Texas border cities to help relieve what President Barack Obama has called a humanitarian crisis.

Customs and Border Protection said in a statement that the agency plans to transport adults and children from the Rio Grande Valley to Laredo and El Paso in Texas and San Diego and El Centro in Southern California.

Friday’s announcement comes less than a week after the agency canceled the California flights. Officials released no further details. It is not known when the flights would begin nor how many migrants would be transported to the state.

Paul Beeson, chief of the Border Patrol’s San Diego sector, told The Associated Press a week ago that the plan at that time called for two flights with 140 passengers each. They were expected to continue every three days, carrying mostly families with children and some adults.


Comment by phony scandals
2014-06-28 08:31:35

“There will be approximately 65,000 UAC in total: 25% local ground transport, 25% via ICE charter and 50% via commercial air.”

Feds advertised for escort services for unaccompanied alien children in January

Written by Michele Hickford, Editor-in-Chief on June 19, 2014

If you think this sudden flood of illegal immigrant children is spontaneous, think again.

According to a “help wanted” Request For Information (RFI) posted on FedBizOpps.gov, the feds were looking for vendors to help escort unaccompanied alien children (UAC) in JANUARY of this year.

The specific vendor requirements state:

ICE [Immigration and Customs Enforcement] is seeking the services of a responsible vendor that shares the philosophy of treating all UAC with dignity and respect, while adhering to standard operating procedures and policies that allow for an effective, efficient, and incident free transport. The Contractor shall provide unarmed escort staff, including management, supervision, manpower, training, certifications, licenses, drug testing, equipment, and supplies necessary to provide on-demand escort services for non-criminal/non-delinquent unaccompanied alien children ages infant to 17 years of age, seven (7) days a week, 365 days a year. Transport will be required for either category of UAC or individual juveniles, to include both male and female juveniles. There will be approximately 65,000 UAC in total: 25% local ground transport, 25% via ICE charter and 50% via commercial air.

You can view the full posting here.

I tried calling both of the contact names listed on the page to see if they’d found a vendor yet, but got voicemail.

The question is, how in January, did the U.S. government know up to 65,000 unaccompanied illegal alien children would be arriving?

Please send me evidence that this is not an orchestrated invasion, and I will remove my tinfoil hat.

Read more at http://allenbwest.com/2014/06/feds-advertised-escort-services-unaccompanied-alien-children-january/#J1xFRjqVA4cQwoqm.99

Comment by Bill, just South of Irvine, CA
2014-06-28 08:38:48

It makes my blood boil about our taxpayer money being used to fly criminals around the U.S.

All the more eager for me to keep working on ways to reduce my adjusted gross income from the taxman. Gotta get back into consulting. The tax advantage is far greater than the MID. By several times the amount.

Comment by Raymond K Hessel
Comment by Mr. Banker
2014-06-28 09:18:12

From the article:

“I have never missed a payment or been in arrears, but I am struggling to make ends meet. My credit rating is excellent so I am not a high risk, but the company has treated me appallingly. I have been a customer for almost 10 years and yet no one will help me. I’m trapped on this deal because I’m currently studying, so I don’t meet other lenders’ affordability criteria.”

If you choose to play the bank’s game of Gotcha then you begin to play the game by signing a dotted line. If the game does not go the way you expected then this is the point where it may dawn on you just how the game got its name.

Remember: You absolutely cannot lose with the stuff I use.

Comment by Raymond K Hessel
2014-06-28 08:39:48

Meanwhile, on Monday, an Argentina default looms. Deadbeats of the world, unite! (Though I would love to see Paul Singer’s vulture fund get stiffed).


Comment by Bill, just South of Irvine, CA
2014-06-28 08:56:54

I am skeptical about some wealthy libertarians encouraging American libertarians to escape out of “Amerikka.” First, those of us who have family ties here, even long passed-away family members, have some emotional tie to this place. Just like I have an emotional, but not intellectual, tie to California because I was born and raised here. Second, the IRS is the only agency of all nations that go outside its jurisdictions to chase after Americans, so you cannot escape that terror organization the IRS. Third, no other nation has the heritage of the bill of rights as well as the right to keep and bear arms. Switzerland does not have any bill of rights that I know of.

I found that one of the authors of “The Market for Liberty,” which is my favorite anarcho-capitalist book, lived a libertarian lifestyle, well below the radar of the taxman. She lived cheap and did not own much, but her liberty was the important thing for her. Another anarcho capitalist is a very wealthy man who moved to Singapore. It’s not really a civil liberty place, but far more capitalistic than the USA. But also it’s far from home.

I ignore posts from those who were not born in California and never were raised here - when they make remarks about Californians. I guess ALL OF US are nuts? Including the conservative Californians and libertarian Californians?

Subract out the government and the nanny state and you have the best place to live on earth.

Comment by Bill, just South of Irvine, CA
2014-06-28 09:13:44

Another point I want to make: I still consider taxation - all taxation as theft and immoral.

But my realist part of me understands the US government and even California government depends on prospering businesses to keep MOST of their profits. The NSA, for example, according to Greenwald’s book, is in cahoots with big American Businesses and Department of Commerce to make American business get more of a share of international customers. The big government needs to feed on profits. And most of Congress is liberal wealthy Democrats who also love profiting from stock gains. They are all prostitutes of course. But we are far from a time when the goose that lays the golden egg will be killed. Even in California.

Personally I can keep most of my stock gains. And I earn a much higher income working in California rather than my state I live in - Arizona.

This does not make me want to let go of finding as many tax breaks as I can. I will continue to do so. But no reason to leave the USA. Not yet when we still insist on owning “scary looking” firearms, whether the government likes that or not.

Comment by Whac-A-Bubble™
2014-06-28 09:19:27

Do you drive on the freeway to work? How do you propose to pay for construction and maintenance thereof w/o taxation? Would you prefer all roads be toll roads? (Actually perhaps not a bad idea for LA & The OC, where charging people on the margin for the right to drive might eliminate terrible smog, congestion, and waste of time and fuel on the area freeways.)

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Comment by Bill, just South of Irvine
2014-06-28 09:27:56

The old “but how will you have roads in a free society” argument has been debunked over and over and over for more than 40years. So much so that the libertarian facebook blogs are abundant with jokes about “the roads!”

Well you sell them.

Privatize them. The toll roads I use in orange county ae never congested. Some places charge higher tolls at rush hour to discourage congestion.

There is a good post on lewrockwell.com I have to repost every few months here to remind amnesiac people: “pay up or die.”

I did not ask for these government monopolies. But as long as I have no choice I will use them. Did not ask to be taxed for social security. But I will aim to get all my money out with interest.

Comment by Whac-A-Bubble™
2014-06-28 09:31:21

“Well you sell them.”

Roads are a congestible public good. What this means is that relying solely on private markets to fund road construction will underprovide them relative to their value to society. Sorry for disagreeing with Lew Rockwell on this point.

However I do believe congestion pricing in LA & The OC would go far to solving deeply entrenched problems with the area’s transportation system. And the proceeds could reduce the tax burden needed to provide for freeway construction and maintenance.

Comment by Bill, just South of Irvine, CA
2014-06-28 09:42:18


“Pay up or Die”


“8. Do not drive on any paved road, highway, and interstate or drive on any bridge.

It is not the job of government to construct roads, highways, interstates, or bridges. And it is a myth that there would be no roads and bridges if the government did not construct them. In early American, most roads and bridges were privately owned and some of them are privately owned today. See Thomas DiLorenzo’s “The Role of Private Transportation in America’s 19th-Century “Internal Improvements” Debate” and Walter Block’s The Privatization of Roads & Highways.”

Comment by Whac-A-Bubble™
2014-06-28 10:07:01

I didn’t say there would be no road construction. I said it would be underprovided by the private sector relative to the need.

Comment by Bill, just South of Irvine
2014-06-28 10:46:47

Our transportation system would be much different without government-owned roads. In essence the government owned roads are subsidies to auto manufacturers. With far fewer roads there would be far fewer cars. Cities on the west coast would resemble New York City. San Francisco already does only because of its natural small area. Private industry always works toward the most efficient way to provide what the market demands. Tranortation is no exception. Also cities would tend to be even more attractive compared to rural areas. Transportation would likely be more expensive in inverse proportion to the population density of an particular area.

Comment by Bill, just South of Irvine
2014-06-28 11:14:13

Yes and libertarian scholars have thought about things nonlibertarians never have, and who assume only government can own scarce resources or those “nobody owns.” the result: those “unowned” resources are overused to the destruction. Of same resources. Big examples: water and air.

Yes there are detailed essays on how to privatize airspace, the waterways, the oceans and the moon. Even Al Gore’s carbon charge for factories is an idea taken out of libertarian scholarly work. But without privatized airspace. Even government recognizes it lacks the ability that capitalism has to raise prices n scarce resources such as air and water.

Comment by Oddfellow
2014-06-28 15:30:08

Airspace is a tough one. How does an airline buy flight routes when airspace is privatized? There would be so many people they would have to deal with. Waterways, too. Who owns the water in a river? Those upstream? Some say water rights were the birth of government.

Comment by Whac-A-Bubble™
2014-06-28 22:34:04

Some have said whiskey’s for drinkin’ and water’s for fightin’.

Comment by Skroodle
2014-06-28 09:51:58


I love it when defense contractors complain that all taxation is theft, but don’t mind picking up that paycheck every Friday.

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Comment by Whac-A-Bubble™
2014-06-28 10:01:18

Government contracts provide private sector employment, and hence are a worthwhile reason to raise taxes, as they are good for economic efficiency, mom’s apple pie and the American way of life.

Comment by Bill, just South of Irvine
2014-06-28 10:07:30

Once again I have to tell retards I am not a defense contractor.

Comment by Bill, just South of Irvine
2014-06-28 10:22:28

Here is how it goes every three months

Retard Oxide:
Retard Skroodle:
Retard In Colorado:

Bill is a defense contractor and a libertarian. Ha ha!

Bill: I am not a defense contractor. I am a libertarian. Should your defense be provided by slave labor? You obviously want it done without a voluntary agreement between government and defense worker.

Retards then stay quiet until three months later. Then repeat the same as above.

Comment by Housing Analyst
2014-06-28 12:06:26

Jiminy cripps…. You just took the gold in the Name That Retard contest. You named the top 3.

And you’re right. Retards will hit the reset button about every 90 days.

Comment by In Colorado
2014-06-28 15:26:12

Once again I have to tell retards I am not a defense contractor.

But you used to be one. Retard.

Comment by Bill, just South of Irvine, CA
2014-06-28 21:09:17

In Colorado: And I do recall you said your son is in military school or training. Is your son also retarded?

Comment by CA renter
2014-06-29 02:20:24

Comment by Bill, just South of Irvine
2014-06-28 10:22:28

Here is how it goes every three months

Retard Oxide:
Retard Skroodle:
Retard In Colorado:

Bill is a defense contractor and a libertarian. Ha ha!

Bill: I am not a defense contractor. I am a libertarian. Should your defense be provided by slave labor? You obviously want it done without a voluntary agreement between government and defense worker.

Retards then stay quiet until three months later. Then repeat the same as above.


How would direct govt employees = “slave labor”? Why do we need to privatize anything? And you’re totally wrong about privatization providing superior goods/services for a lower price.

And then, there’s this little nugget:

“Private industry always works toward the most efficient way to provide what the market demands.”

No, private industry always works toward the **most profitable** way to provide what the market demands at a given point in time. Sometimes, that private market is responsible for that demand — advertising to people in order to convince them to buy something they don’t really want, and certainly don’t need, for instance.

There is nothing more wasteful than capitalism and your vaunted private industry. They are responsible for tremendous waste and inefficiency. Consider planned obsolescence, for example. Or the advertising/marketing machine that convinces people that they must follow fashion or forever be shunned.

And your private roads? Can you imagine trying to get across the country when different owners might not want people crossing their land or using their roads unless they pay an exorbitant fee?

No offense, Bill, but I just don’t think you’ve really thought these things through.

Comment by Bill, just South of Irvine, CA
Comment by Raymond K Hessel
2014-06-28 11:01:09

I love this country, despite its problems, and can’t ever see leaving. I’d rather work to set things right, or at least keep trying.

Comment by Whac-A-Bubble™
2014-06-28 13:56:17

I’m similarly idealistic, tempered by the realism that creeps into your thinking over the decades. But I keep trying!

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Comment by Oddfellow
2014-06-28 16:08:21

¨I love this country, despite its problems, and can’t ever see leaving. I’d rather work to set things right, or at least keep trying¨

+1. I’m not going anywhere, except maybe on vacation. We can fix this sucker. Don’t let the naysayers fool you, they’re just running interference.

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Comment by Whac-A-Bubble™
2014-06-28 22:36:54

“Don’t let the naysayers fool you, they’re just running interference.”

Belief in a better tomorrow is a quintessential American trait. And I have heard this from foreign expats from countries where this belief in a better tomorrow is dead.

Comment by Bill, just South of Irvine
2014-06-28 17:10:12

I was thinking the other day that by golly, I am doing on a state level what some libertarians are recommending on a national level.

That is, I am multi state for the purpose of having more freedom. My “scary looking” rifle with high capacity magazine clips and my high capacity Glock and my Colt 45 are in Arizona. I do know people in California who are staunch RKBA types who own illegal firearms (by California law) or used to own. But I don’t want to do that.

Some people hate Phoenix, but eight months out of the year it is perfect for me. It is my retirement spot in twelve years. arizona’s income tax cut Brewer voted in two years ago is fully implemented in 2016. I wonder if Arizona libtards will hate the extra freedom so much that they will move to California? Not! They love higher taxes on other people only.

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Comment by P.T. Barnum
2014-06-28 09:37:35

“Argentina, which defaulted on a record $95 billion in debt in 2001, has said it would face a second default if forced to pay both classes of bondholders.”

One a minute.

There is no learning curve.

Comment by Whac-A-Bubble™
2014-06-28 10:09:04

Here is your learning curve:

This Time is Different Eight Centuries of Financial Folly

Comment by Whac-A-Bubble™
2014-06-28 10:17:41

Here is a cool visual on the modern history of financial crises.

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Comment by Whac-A-Bubble™
2014-06-28 08:51:40

So why exactly is JPM snapping up Chinese real estate investments as their bubble collapses? Are they trying to catch a falling knife, or do they smell a bailout in the works akin to the Fed’s QE3 bailout of US real estate?

I guess time will tell.

Comment by Whac-A-Bubble™
2014-06-28 08:55:07

Is one of America’s premier investment banks morphing into a vulture fund?

First Published: Mon, Jun 23 2014. 11 59 AM
JPMorgan buys China’s larger developers as bubble deflates
Chinese real-estate firms accounted for six of the 10 best-performing Asian notes in the past three months

JPMorgan Asset Management and Invesco Asset Management say China’s cooling property market is an opportunity to boost dollar bond holdings as the government’s targeted stimulus benefits the largest developers. Chinese real-estate companies accounted for six of the 10 best-performing Asian notes in the past three months, according to a Bank of America Merrill Lynch index. The yield on 2018 debt of China Overseas Land and Investments Ltd, the nation’s largest developer by market value, dropped to 3.35% last week, from a record 4.31% on 5 February while that on similar-maturity bonds of China Vanke Co. fell to 3.95%, from an all-time high of 5.07% on 20 March.

“We will pick the winners from these trends,” said Stephen Chang, head of Asian fixed income at JPMorgan Asset, which oversees $39 billion (about Rs.2.35 trillion) in emerging-market debt. “Although sales and prices are falling along with margins, we have identified the larger developers are gaining market share and executing well.” China’s Premier Li Keqiang has pledged to safeguard this year’s growth target of 7.5%, fuelling bets the government will encourage increased lending to selected projects and relax restrictions in the real-estate market.

Comment by Whac-A-Bubble™
2014-06-28 08:58:09

Sorry if this amounts to a repost, but here is the Bloomberg version of this story:

JPMorgan Buys Larger Developers as Bubble Deflates: China Credit

By Fion Li Jun 22, 2014 9:00 AM PT

JPMorgan Asset Management and Invesco Asset Management say China’s cooling property market is an opportunity to boost dollar bond holdings as the government’s targeted stimulus benefits the largest developers.

Chinese real-estate companies accounted for six of the 10 best-performing Asian notes in the past three months, according to a Bank of America Merrill Lynch index. The yield on 2018 debt of China Overseas Land & Investments Ltd., the nation’s largest developer by market value, dropped to 3.35 percent last week, from a record 4.31 percent on Feb. 5, while that on similar-maturity bonds of China Vanke Co. fell to 3.95 percent, from an all-time high of 5.07 percent on March 20.

“We will pick the winners from these trends,” said Stephen Chang, head of Asian fixed income at JPMorgan Asset, which oversees $39 billion in emerging-market debt. “Although sales and prices are falling along with margins, we have identified the larger developers are gaining market share and executing well.”

Comment by Whac-A-Bubble™
2014-06-28 09:10:18

Sounds like JPM is positioning itself to capture gains from Chinese government stimulus measures. This seems like a very smart investment strategy: Figure out what part of a collapsing asset bubble is going back up due to government bailouts and purchase these assets on the bailout announcements before resulting price appreciation; then dump at the Echo Bubble peak.

I’m sure many other investment banks and hedge funds are following a similar game plan.

Comment by Whac-A-Bubble™
2014-06-28 09:02:44

Finance China
How the China bubble could puncture U.S. banks

by Stephen Gandel
June 13, 2014, 4:46 PM EDT

China is doing the global carry trade, and that could pose major risks for U.S. banks.

The conventional wisdom is that China doesn’t hold much direct risk for U.S. banks. Sure, if China were to have a financial crisis, and if it were to fall into recession — a long way to go, considering its recent annual growth of 7% — that would do serious damage to the global economy. American banks and the U.S. economy would feel that. But in terms of direct exposure to China, U.S. banks don’t stand to lose a lot.

According to a report last week from debt rating agency Fitch, U.S. banks have a collective $83 billion in direct loan exposure to China. That isn’t very much in the scope of the U.S. banking sector. JPMorgan Chase (JPM 0.24%), alone, for instance, has over $700 billion in total loans. The entire U.S. banking sector has nearly $15 trillion in assets. For U.S. banks, China is still not that big of deal.

That appears to be changing, though. Fearing a credit bubble, a year ago, Chinese authorities sharply raised domestic interest rates to slow lending made by local banks. That opened up a huge gap between U.S. interest rates, which are around 0.50% for short-term interbank loans, and Chinese interest rates, which are 5% for short-term banks loans.

And so it appears there is easy money to be made borrowing money from the U.S. and Europe, and lending it in China. The trade’s been growing for a while, but it has attracted attention lately. And it’s a bit dicey, at least for the U.S. banks.

In the last week or so, a number of large banks have been trying to figure out if they were taken in a loan fraud scheme in which a Chinese commodities trading firm in the port of Qingdao pledged the same collateral to a number of lenders. The scheme has shed light on the fact that a large portion of the overseas lending that Chinese companies are doing to capture the interest rate spread has been with loans collateralized with commodities.

Goldman Sachs estimates that commodities-based lending has resulted in an inflow of $110 billion of foreign currency into the Chinese economy in the past four years, or about a third of all new short-term debt in China in that time.

Citigroup (C -0.19%) appears to be the only large U.S. bank that has fallen victim to the Qingdao fraud. But most large U.S. banks make commodities-based loans, and the practice has been growing recently. Last year, banks around the world lent $687 billion to commodities-based businesses, according to Bloomberg, though much of those loans were made directly to the companies and secured by raw materials. JPMorgan was the top U.S. lender worldwide, at $57 billion, followed by Wells Fargo (WFC 1.01%), which gave out $47 billion.

Many of these loans might not be factored in the estimates that Fitch and others have put together to calculate U.S. banks’ exposure to China. For instance, sometimes commodities loans are structured as derivatives or swaps. Fitch says its China loan estimates do not factor in derivatives or guarantees.

What’s more, when it comes to commodities, some banks might not even realize they are taking on China risk. The Citi loan that ended up sending money to China by way of the Qingdao port was made to Swiss commodities trading firm Mercuria. The commodities that Mercuria used to finance the loan were stored in Qingdao, on loan from a Chinese commodities company named Decheng Mining.

And unlike other types of lending, banks typically don’t break out just how much money they have lent out based on accounting. “I have never seen any bank balance sheet that has that information,” says Haoziang Zhu, an economics professor at MIT who has studied commodity-based lending. “It’s hard to track.”

Comment by Whac-A-Bubble™
2014-06-28 09:25:59

Lawsuit Adds to Concern Over China Commodities Fraud
June 27, 2014 4:19 am

HONG KONG — China’s commodities fraud scandal continues to widen, with more companies reporting losses on bogus aluminum and copper financing deals, while Chinese authorities now say gold contracts have also been faked to secure more than $15 billion in loans.

On Thursday, a coal producer in the northeastern city of Taiyuan, in Shanxi Province, said it had filed a lawsuit to reclaim about $170 million it said it was owed. The producer named among the defendants is the Chinese company at the center of an investigation into aluminum and copper financing fraud at Qingdao Port, in northeastern Shandong Province.

The lawsuit, filed by Shanxi Coal International Energy Group, claims that Dezheng Resources and one of its subsidiaries, Qingdao Decheng Mining — the two main companies under investigation in Qingdao for suspected fraud — had acted as guarantor in several contracts to import aluminum.

The suit, which also names four other companies, is asking the high court in Shanxi Province to award two payments of $120.4 million and 352.5 million renminbi, or $57 million, that Shanxi Coal said it is owed because the defendants failed to honor their obligations under the contracts.

News of the lawsuit came as China’s top government auditor released a report on Tuesday indicating that gold had also been used in fraudulent commodities financing deals.

The National Audit Office said that since 2012, it had conducted spot checks that caught 25 domestic gold producers conducting “fake trades” to secure loans with a value of 94.4 billion renminbi.

These financing deals involved a form of illegal arbitrage between bank interest rates and foreign currency exchange rates and yielded a profit of around 900 million renminbi, according to the auditor. The report did not identify the gold companies and banks involved or say whether anyone had been punished.

Comment by Whac-A-Bubble™
2014-06-28 10:14:42

What is it with aluminum, warehouses and fraudulent metals transactions?

U.S. Subpoenas Goldman in Inquiry of Aluminum Warehouses
Published: August 12, 2013

The Commodity Futures Trading Commission has issued subpoenas to Goldman and owners of other major warehouses as part of its inquiry into irregularities in the aluminum market that are believed to have cost consumers billions of dollars since 2010.

The subpoenas seek all internal documents, e-mails, correspondence, voice recordings and other records concerning the warehouse operations dating back to January 2010, according to two people familiar with the documents. The subpoenas also demand documents and correspondence regarding the London Metals Exchange, a private trade association that regulates warehousing. The subpoenas indicate that the federal inquiry has 30 “areas of interest.”

Goldman bought Metropolitan International Trade Services, a string of Detroit-area metals warehouses, in 2010 and soon afterward beverage makers and manufacturers began complaining that the company was restricting the outflow of metal, causing lengthy delays in delivery. Those waits, which grew from six weeks in 2010 to around 16 months now, mean higher storage costs for metal owners, who are charged rent by the day.

Because of a quirk in the formula used to set the price of aluminum on the spot market, the delays also increase the prices nearly all manufacturers pay for aluminum even when they buy metal that was not stored in a warehouse.

Industry analysts and beverage makers estimate that long queues cost manufacturers and consumers more than $5 billion.

Federal regulators began examining the metals warehouses last month, after The New York Times reported that Metropolitan had been paying metal owners an incentive to move their aluminum from one warehouse to another, which contributed to the delays.

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Comment by Raymond K Hessel
2014-06-28 11:03:21

Translation: Goldman is being hit up for more campaign contributions to make its “legal problems” go away.

Comment by Whac-A-Bubble™
2014-06-28 13:57:50

Right. We haven’t heard much about this story since it broke last summer. I’m looking for the next NYTs story about the fine in the $millions they will face for a scam that reaped $billions.

Comment by Whac-A-Bubble™
2014-06-28 09:28:10

I’m guessing this breaking story may prove to have very long legs.

China hit by Another Commodity Scandal as $15bn of Gold Transactions are Declared Fraudulent
By Finbarr Bermingham
June 26, 2014 13:55 BST

China’s commodities trading sector has been dealt a fresh hammer blow after its National Audit Office’s (NAO) uncovered tens of billions of renminbi (RMB) in loans were obtained on the back of false gold transactions.

The NAO said that RMB94.4bn ($15.2bn, €11.2bn, £8.9bn) worth of loans had been backed by falsified gold transactions.

The report suggested that bullion producers had been borrowing on the back of commodities stocks, subsequently holding the borrowed amount in high-yield securities. This practice became more common after the Chinese government tightened lending restrictions in an effort to limit the amount of cheap liquidity in the market.

However, it has emerged that the producers (of which there were 25) have been borrowing on the back of non-existent transactions.

The news comes as the probe into the Qingdao Port copper and aluminium fraud continues, with authorities investigating commodity traders who are alleged to have obtained multiple loans on the back of single instances of metals stock.

Helen Lau, senior analyst for metals and mining at UOB Kay Hian in Hong Kong tells IBTimes UK that the news will further spook banks, which have limited or in some cases stopped lending to Chinese commodity traders.

“Already the banks are very cautious. They already cancelled or reduced their loans to any commodity houses. They’ve suspended new accounts. I think there’ll be a supply squeeze – especially on metals like copper. There’s not much supply from the warehouses, inventories have been reduced,” Lau said.

However, some western banks have moved to assuage fears that they will withdraw from China completely.

Comment by Whac-A-Bubble™
2014-06-28 09:04:54

Investing 6/19/2014 @ 10:01AM
No Violent Pop As China Housing Bubble Continues Deflating

You have to hand it to the Chinese government. They are quite good at managing controlled demolitions. The housing market, roaring for at least five years as both a result of rising wages, and speculation by Chinese investors, is cooling.

On Thursday, that 35 out of the 70 cities it tracks reported monthly price declines for new homes. That’s up from 8 declines in April. According to NBS, prices in 15 cities were flat but new home prices in 20 cities did see price growth from April. The figures exclude government-subsidized homes.

The average price of new houses in the 70 cities, including government-funded affordable housing, meanwhile, dipped 0.2 percent in May, the first month-on-month decrease since June 2012.

Shanghai remains the most expensive city on the mainland. Home prices there increased 11.3% from a year earlier, the most in the country. It was the seventh straight month the city led the nation.

Comment by Raymond K Hessel
2014-06-28 11:04:23

“Subprime is contained.” - Ben Bernanke, right before the housing bubble imploded.

Comment by Whac-A-Bubble™
2014-06-28 13:59:36

The entire financial system was in a deep freeze and incipient panic when he uttered those words (August 2007). I recall commenting at the time to a long-time friend and adviser that I believed we were in a historic financial panic; he didn’t buy it.

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Comment by Whac-A-Bubble™
2014-06-28 14:09:32

Emerging Markets
China’s Housing Bust Isn’t Done
A successful property IPO in Hong Kong stirs hopes that are unlikely to be realized. In the meantime, two opportunities to short the shares.
By Shuli Ren
June 28, 2014 12:03 a.m. ET

Shares of China’s largest developer, China Vanke, jumped 7% in its debut last Wednesday, after it moved its Shenzhen-listed B-shares to the more liquid Hong Kong bourse. The quick rise was a welcome change from the recent negative headlines about Chinese property stocks. Among them: New-home prices fell in May, and sales volume in the first half of June dipped to a 2½-year low.

So was Vanke’s (2202.Hong Kong) gain merely a benefit of tapping a bigger market or an early sign that hard-hit property stocks are ready to improve?

Value has started to emerge, but it seems premature to jump back in to a group that’s down 12% this year, versus the broader Hang Seng China Enterprises Index’s 4% drop. The declines mean property shares now trade at 5.8 times forward earnings, far below their five-year average of 10.75 times.

Wait for more news of housing price cuts before bargain-hunting the shares, suggests JPMorgan Chase. Right now sales are low because price-conscious buyers are waiting as developers hold on, hoping for a better second half. But the oversupplied market—especially in lower-tier cities—will deteriorate further in the next six to eight weeks, says the bank, and developers will have to cut prices to clear inventories. When sales volume, an important stock-price driver, picks up again, investors can start to assume China’s property stocks have bottomed.

Developers that are flexible on pricing tend to fare best—Vanke is a good example. It has already cut prices and reached 41% of its annual sales target five months into 2014, ahead of its peers’ 30% average. Its sales rose 16% from a year earlier, while the market fell 10%. Deutsche has a 13.39 yuan price target (HK$16.6 or US$2.14) on Vanke, implying a 19% upside. Analysts also like state-owned China Overseas Land & Investment (688.Hong Kong) for similar reasons.

THERE ARE OPPORTUNITIES for nimble investors to short stocks. One idea is to play a developer’s exposure to oversupplied tier-3 cities. China Resources Land (1109.Hong Kong), for instance, will by 2015 see over half of its property sales coming from tier-3 cities, up from 35% last year, estimates UBS. And since more price cuts are expected in these cities, China Resources Land’s profit margins will come under pressure. In addition, this developer only achieved 28% of its sales target by May, lagging behind the industry average. JPMorgan suggests a pair trade, going long China Overseas Land & Investment and shorting China Resources Land on a three-month basis.

A second possibility is to short developers with lot of debt, such as Evergrande (3333.Hong Kong) and Country Garden (2007.Hong Kong), which last year had net-debt-to-equity ratios of 74.9% and 67.3%, respectively. Apart from high gearing, corporate governance is an issue at Evergrande. It plans to spend 10 billion yuan on a peripheral bottled-water business, and its CEO has been selling the company’s shares. As for Country Garden, it expanded rapidly into lower-tier cities last year, making it vulnerable to a squeeze on margins.

To be sure, these trading ideas are based on the premise that China’s property market will follow a V-shape, rather than Japan’s extended decline. JPMorgan thinks the V will prevail. In the past, excess inventories cleared quickly when developers were willing to make 20% price concessions. “The worst in the physical market has not come yet, but when it comes, it will be quick and swift,” noted the bank. Investors should hope history repeats.

Comment by FLnative
2014-06-28 09:10:58

How bad is this housing market going to get? The average family can’t buy a decent house on either coast of South Florida.

Comment by FLnative
2014-06-28 13:31:12

And it continues…when is Blackstone going to stop?


Comment by FLnative
Comment by In Colorado
2014-06-28 15:22:52

How bad is this housing market going to get? The average family can’t buy a decent house on either coast of South Florida.

Let them buy in OTown.

Comment by Whac-A-Bubble™
2014-06-28 09:14:28

AZ Dan: Any thoughts on the Qingdao commodities scandal?

Comment by Whac-A-Bubble™
2014-06-28 09:17:00

After port fraud, China’s vast warehouse sector under scrutiny
By Melanie Burton and Fayen Wong
SYDNEY/SHANGHAI Mon Jun 23, 2014 7:02am EDT
A worker pushes a cart filled with packages at a logistics hub in Fuzhou, Fujian province November 13, 2012. REUTERS/Stringer
Credit: Reuters/Stringer

(Reuters) - Shaken by a fraud investigation into metal financing in the world’s seventh-busiest port, banks and trading houses have been made painfully aware of the risks they face storing commodities in China’s sprawling warehouse sector.

The probe at Qingdao port centers around a private metals trading firm suspected of duplicating warehouse certificates in order to use a metal cargo multiple times to raise financing.

Some banks have asked clients to shift metal, used as collateral for loans, to more regulated London Metal Exchange (LME) warehouses outside China or those owned and operated by a single warehouse firm to limit their exposure.

“The banks still haven’t looked under the hood,” said an executive at a bank involved in commodity financing in China, referring to China’s warehousing sector.

At the heart of the issue is China’s roaring commodity financing business, which has helped drive up stockpiles of commodities at ports to record levels, stored in warehouses not always regulated to the same extent as elsewhere.

Though many global firms are involved in the warehouse industry in China, there has been outsourcing to local firms to cut overheads and avoid dealing with complex local regulations.

Using commodities as collateral in financing in China is common practice and not illegal, but issuing receipts to repeatedly mortgage an asset is fraud and could leave more than one creditor holding claims to the same collateral.

Illustrating how difficult it may be to unravel competing claims, China’s CITIC Resources Holding Ltd said that a court had been unable to secure more than 100,000 tonnes of alumina stored at Qingdao port.

Traders said there was a risk the metal could have been already claimed before part of Qingdao Port was sealed off, adding that at least two trading houses had moved metal out as soon as news of the scandal broke.

CITIC Resources said it would conduct its own investigation and was considering further legal action.

In Qingdao, sources with knowledge of the probe said authorities were looking at whether the firm under focus, Decheng Mining, had secured multiple warehouse receipts because an affiliate managed logistics at the port’s Dagang bonded zone.

Phone calls to Decheng Mining and its parent firm, Dezheng Resources, seeking comment were not answered. Officials at Qingdao port could also not be reached.

“Warehouse receipts are not title documents, they are documents of entitlement. But they are being used as title documents for sales and purchase and transfer of ownership,” said a person at a warehouse company with operations in Qingdao.

“Everywhere else outside of China, a warehouse receipt is cut for one party.”

A source at a Western bank with direct knowledge of Qingdao said warehouse firms should bear the brunt of responsibility, while a senior official at a warehouse firm at the port said responsibility “remains very much up in the air.”

A lawyer, who has previously been involved in litigation over fraudulent warehouse receipts, said banks primary recourse would be against whoever had forged receipts.

“But if the fraudster is gone, the bank may decide that it wants to go against the warehouse,” said the lawyer, who did not want to be named because of the sensitivity of the issue.

Comment by Whac-A-Bubble™
2014-06-28 09:22:35

China’s Gold Bullion Imports Slump as $15bn of “Fake Deals” Alleged
Friday, 6/27/2014 08:38
Copper “trade financing” scam seen hitting gold, deterring investors and imports

GOLD BULLION imports to China halved in May from the same month last year, and could drop further say analysts as a “metal trade financing” scandal spreads from copper to include the precious metal.

Gold imports through Hong Kong – the primary route for bullion shipped into the world’s No.1 consumer nation – totaled 52 tonnes last month net of exports, new data showed Thursday.

The lowest since January 2013, those gold bullion imports were down by more than 20% month-on-month for the third time running.

China’s auditor general has meantime uncovered CNY 4.4 billion ($15.2bn) of what he calls “fictional” trades used to borrow money against gold bullion since 2012 – echoing trouble in copper, where the same underlying metal has been used multiple times as collateral for loans.

With an on-going investigation at Qingdao – the world’s 7th busiest port – now “trying to establish who has proper title to the pledged metal,” says a note from French investment and bullion bank Natixis, Chinese demand for copper imports dropped significantly.

“This pattern could be repeated in gold, where investors may be reluctant to engage in new financing deals until the situation is clear.”

“Any scaling back by banks of gold-backed financing deals,” agrees senior analyst Liu Xu at Capital Futures Co. in Beijing, quoted by Bloomberg, “might lead to a short-term reduction in Chinese imports and also spur some sales by companies looking to repay lenders.”

Comment by Whac-A-Bubble™
2014-06-28 10:06:01

That was a really interesting plunge the gold price took towards the end of yesterday’s trading action. But so long as the gold price is sticky around $1300/oz, traders needn’t worry about the breaking news on the Chinese wharehouse scandal.

Comment by Bill, just South of Irvine
2014-06-28 11:18:18

I am not concerned for an instant.

(Comments wont nest below this level)
Comment by Bill, just South of Irvine
2014-06-28 11:20:07

But you did use the term “trader.” traders always have to be concerned.

Accumulators of precious metals who use it as insurance just yawn, fluff their pillow, and get back to sleep.

Comment by Whac-A-Bubble™
2014-06-28 14:00:52

Agreed. How much leverage you are using to fund your investments matters a lot to how much small fluctuations in price are cause for concern.

Comment by Whac-A-Bubble™
2014-06-28 09:52:48

This story appears to offer a fantastic object lesson in experience’s dear school for fools on why one should not take economic statistics coming out of a communistic country at face value.

Comment by Whac-A-Bubble™
2014-06-28 10:02:53


Comment by phony scandals
2014-06-28 09:52:50

“After America Comes North America,” Gen. Petraeus Boasts

Written by Alex Newman
Friday, 27 June 2014 12:30

Former general and CIA chief David Petraeus (shown), a key figure in the globalist Council on Foreign Relations and the shadowy Bilderberg network, boasted at a recent conference that the United States of America is set to be merged into the continental regime being erected under the North American Free Trade Agreement (NAFTA). Speaking at the Margaret Thatcher Conference on Liberty last week in London, the ex-commander of U.S. forces in Afghanistan and Iraq essentially celebrated the end of U.S. independence — and by extension, the demise of the Constitution.

“After America comes North America,” Petraeus said confidently in answering the question about what comes after the United States, the theme of the panel discussion. “Are we on the threshold of the North American decade, question mark? I threw that away — threw away the question mark — and boldly proclaimed the coming North American decade, says the title now.” He also boasted about how the three economies have been put “together” over the last 20 years as part of the “implementation” of the North American Free Trade Act.

The “highly integrated” forces of Canada, the United States, and Mexico, Petraeus continued, will become the world’s powerhouse for energy and science. “There are four revolutions that are ongoing at various levels in each of the countries but foremost in the United States,” said the former CIA chief, who now serves as chairman of the KKR Global Institute. “The energy revolution is the first of those, which has created the biggest change in geopolitics since the rise of China since 1978.” The other “revolutions” include IT, manufacturing, and life sciences, which, “as highly integrated as they are, allow you to argue that after America comes North America,” he added.

Petraeus, who resigned from leading the CIA “killing machine” in disgrace after his extramarital affair was exposed, also touted advances in genetics and especially robotics. He suggested robots would soon be displacing huge numbers of manufacturing workers across North America and even the world. Combined with the wave of illegal immigrants currently pouring across the southern U.S. border as part of what officials and critics have said is an orchestrated operation endorsed by the Obama administration, the competition for jobs, then, will become even more intense. Indeed, the wage gap between the United States and Mexico is narrowing.

The former CIA boss also commented on a broad range of other topics at the London summit. He demanded “immigration reform,” for example, perhaps linked to what he termed the “unique” demographics of the three NAFTA countries. Turning to Iraq and the escalating crisis there, Petraeus also cautioned against air strikes without a more coherent strategy. “The United States cannot be the air force for the Shia militias,” he said. Separately, he claimed that Washington, D.C., politics was the biggest threat to U.S. national security.

Most of the establishment press missed Petraeus’ comments at the summit, as well as the significance of what he was saying. Outside of the alternative media and a blog post about the London gathering in the U.K. Telegraph, in fact, there was virtually no coverage of the comments on the “North American” superpower that the senior establishment figure openly claimed was going to take over after America’s dominance fades.

One of the few to catch it all was reporter David Knight at Infowars. “He essentially dances on the grave of the sovereign state of America that he says is being replaced, or has been replaced, by NAFTA,” Knight said in a newscast about Petraeus’ extreme comments. “Of course, it’s ironic that Margaret Thatcher was essentially driven out of being the U.K. prime minister after she opposed the idea of getting rid of nation-states in the European Union when she went to Bilderberg.” In recent years, Petraeus has become a regular at the annual Bilderberg summits, where top globalists in Big Business and Big Government meet.

It is not the first time, though, that Petraeus has been openly touting the establishment dream of building a “North America” by smashing American sovereignty — and by extension, self-government and guarantees for individual liberties under the U.S. Constitution. Earlier this year, for example, writing in the CFR’s Foreign Affairs publication, Petraeus was similarly boasting about the ongoing merger in a piece entitled “Perfect Partners: North America’s Shared Future” he authored with fellow fringe globalist and ex-World Bank President Robert Zoellick.

In the piece, the globalist duo wrote that “all three countries have the chance to forge a new forward-looking agenda for North American competitiveness and integration.” The term integration, of course, was and continues to be used to describe what is happening around the world as formerly sovereign nations are merged into unaccountable regional regimes such as the EU, the Union of South American Nations (UNASUR), the African Union, ASEAN, the Gulf Cooperation Council, and more. Globalists around the world often use the term “New World Order” to publicly describe the end game.

In the article for the CFR, a key globalist driver of North American “integration” and the erosion of sovereignty worldwide, Petraeus also called for an “ambitious strategy” to “strengthen North America.” He suggested “adopting policies that foster” a more “integrated region,” inaccurately describing America’s system of self-government under constitutional rule of law as a “democracy” — a form of government abhorred by the Founding Fathers, who established a federal Republic.

The three “democracies” in North America, he said, need a “common vision” so the “region” can “meet its full potential.” While NAFTA laid the foundation, Petraeus said what is required now is “a comprehensive and interlocking program of policies and projects that draws together not only the three countries’ national governments, but also their state and provincial authorities, private sectors, and civil societies.” Why such a program was supposedly needed was not immediately clear, but it is happening quickly.

Virtually every realm of government policy, though, should be continental in scope, Petraeus suggested. He called for “continental cooperation” in “security, commerce, and protection of the environment.” The continent must also have a “unified energy strategy,” Petraeus said. Even foreign policy should entail a “common approach,” and crime fighting should feature enhanced “North American coordination,” the globalist operative declared. He concluded by calling on Obama to work with the government leaders of Mexico and Canada to “advance the shared future North America needs.”

Before writing the CFR piece touting the end of U.S. sovereignty, Petraeus teamed up with Michael O’Hanlon, a senior fellow at the globalist Brookings Institution, to advance the same narrative in the Washington Post. “With all of these advantages, together with our North American Free Trade Agreement (NAFTA) partners, the energy-rich and economically dynamic Canada and Mexico, we could be on the threshold of the New North American Decades,” the duo wrote in an April, 2013, opinion piece. Mexico’s corrupt and dysfunctional economy, of course, is rarely described as “dynamic” by serious observers.

Separately, in late January at the Emirates Center for Strategic Studies and Research (ECSSR) in Abu Dhabi, Petraeus expanded on the radical vision for the continent and its peoples in a speech entitled “The Coming North American Decades.” “The world is on the threshold of what might be called the North American Decades,” he declared after a lengthy introduction touting his credentials, United Nations awards, and more.

Petraeus again cited the “four revolutions” underpinning his dubious theories about “North America,” but as usual, failed to mention the fact that all of the “integration” is proceeding quietly and under the radar. Indeed, as Americans and Canadians discover what is happening, the opposition to the “North America” scheming continues to grow like wildfire. Still, the process of regionalization and sovereignty destruction is accelerating, too — all over the world, but especially in North America.

The North American Union (NAU), of course, has been a top goal of senior globalists in all three countries for over a decade. The supposed brainchild of CFR operative Robert Pastor, often dubbed the “Father of the NAU,” U.S. diplomatic cables from the embassy in Ottawa leaked by WikiLeaks offered a great deal of insight into the truly radical plot. Among other topics, the document, signed by the U.S. ambassador to Canada at the time, discusses ways of getting around national constitutions and even the possibility of an eventual “monetary union” across the continent.

Pastor died earlier this year after having credited the constitutionalist John Birch Society organization, an affiliate of this magazine, for the demise of his extreme NAU schemes. However, as Petraeus’ ongoing celebration of North American “integration” reveals clearly, the plot to quash American sovereignty under various regional and global governance regimes is far from dead yet. In fact, at this moment, U.S. “trade” officials are quietly plotting with the EU and various governments along the Pacific Rim to erect even broader “free trade” regimes that threaten to obliterate what remains of American sovereignty. Already, transnational “NAFTA tribunals” are overruling U.S. courts and laws, with the process accelerating.

http://www.thenewamerican.com/…8585-after-america-comes-north-america-gen-petraeus-boasts - 58k -

Comment by phony scandals
2014-06-28 10:09:57

The Future of North America and Destruction of the Middle Class.

Posted by novato 3per , June 20, 2014 at 09:36 AM

Excerpt from an article by HERSCHEL SMITH . General Petraeus: General David Petraeus, the former CIA director and head of the international forces in Afghanistan (ISAF), has today said that the United States is suffering deeply because of partisanship, and said that the country needs immigration reform. Gen. Petraeus was speaking on the “After America, What?” panel at the Centre for Policy Studies’ Margaret Thatcher Liberty Conference at the Guildhall in the City of London. “After America comes North America,” he said, discussing how Canada, the United States and Mexico are set to be a formidable force together, “notwithstanding Mexico’s rule of law issues”. We’ve discussed it many times before. The alleged need for immigrants pertains to the desires of corporations to have low paid workers. It doesn’t enrich you or me, it enriches the rich (heads of corporations, boards of directors, and so on). Here’s how it works. It helps the corporate bottom line by forcing the middle class to pick up the tab for medical care, which burden happens largely on the backs of nurses in emergency rooms (my daughter is a nurse in an ER), with medical insurance premiums escalating in order to pay for the service. Food stamps (so called SNAP) also factor into the calculus, as well as driver’s insurance (for uninsured motorists coverage). It isn’t that there is no cost for low paid workers. It’s that the cost is borne by the middle class as welfare to corporations and the wealthy. The GOP is connected at the hip to such interests in terms of money, while the Democrats are connected in terms of future voters. With such powerful interests at stake, it should be obvious why the Southern border is a sieve and illegals are left in the country unmolested. But Petraeus is at least honest, admitting what many of the politicians don’t want to confess. They see America more as an idea, or an endless checkbook, rather than a place with people and borders. The idea they cherish is one of wealth propagation among the elite (for the GOP), or power in perpetuity (for the Democrats). The idea of the constitution has long ago lost its appeal. Petraeus advocates “immigration reform,” but he refers to North America as America’s replacement, almost as if it’s a foregone conclusion rather something he needs to advocate. But such a thing will bring about the end of the middle class as we know it. With trillions of dollars in unfunded liabilities, a behemoth socialized medical system (with millions of new immigrants added to the rolls), and a fiat money system which existence relies on the printing presses, the system cannot go on for much longer. North America. Increasingly it will take on the face of gang members. Welcome your newest neighbor – affiliates of MS13. They think you owe them a living. Said one of them. ‘You’re going to let me go, just like you let my mother go, just like you let my sister go. You’re going to let me go as well, and the government’s going to take care of us Prepare.

novato.patch.com/…/the-future-of-north-america-and-destruction-of-the-middle-class - 265k

Comment by Raymond K Hessel
2014-06-28 10:16:35

Militarized cops as unaccountable corporate-state mercenaries - our descent into neo-feudalism continues apace. Pioneered in Massachusetts, unsurprisingly. The founding fathers must be spinning in their graves.


Comment by In Colorado
2014-06-28 15:20:40

Private my azz. I’m sure they collect their paychecks and pensions from the taxpayers.

Comment by phony scandals
2014-06-28 10:20:14

Statism: Ideas so good they have to be mandatory.

Comment by Bill, just South of Irvine
2014-06-28 11:16:40


Comment by Whac-A-Bubble™
2014-06-28 10:39:33

Are artificially manipulated rock-bottom mortgage interest rates inducing you to hang on to your family home for longer than life’s circumstances would otherwise dictate?

The flip side of this is that young people who might otherwise start families have little choice but to overpay for housing, making the idea of having children seem financially foolish.

Comment by Whac-A-Bubble™
2014-06-28 10:45:47

U.S. News
Baby Boomers Hold On to Houses
Despite Empty Nests, Older People Stay Put
By Nick Timiraos
June 27, 2014 6:51 p.m. ET

The boomers are staying put—at least for now.

The going wisdom says the number of homes for sale should surge in coming years as baby boomers—those born between 1946 and 1964—trade in large, detached single-family homes for condos or attached homes in more urban areas. But two reports suggest such downsizing has yet to materialize and may not to the extent suggested by some commentators.

The downsizing theory is simple: As the kids of boomers graduate from college and move out, their parents will no longer “have a need for the abundant living space, quality schools and other amenities typically associated with single-family suburban residency,” said Patrick Simmons, an economist at mortgage-finance company Fannie Mae, (FNMA +1.53%) in a recent report.

Meanwhile, census data released this week showed population growth for Americans over age 69 has been the lowest in the most dense counties, the only age group in which that is happening, said Jed Kolko, chief economist at Trulia Inc., (TRLA +4.86%) the real estate website.

The Fannie analysis of Census Bureau data finds boomers are becoming empty-nesters “in droves.” The oldest half of all boomer households that were made up of a married couple with at least one child under age 18 declined to 3% in 2012 from 10% in 2006. The rate is dropping for younger boomer households, too.

Older workers also have been dropping out of the labor force. But while boomers are working less and their kids are moving out, the share of boomers living in detached single-family homes was roughly the same in 2012, the most recent year for which data were available, as in 2006, Fannie said.

Boomers may be slow to downsize for several reasons, wrote Mr. Simmons. For one, they may like their homes. A 2010 survey by the AARP, the seniors-advocacy group, found 84% of boomers said they would prefer to live in their current houses for as long as possible.

Meanwhile, the scars of the housing bust and the Great Recession have prevented some from moving because they don’t have enough equity in their homes or are unwilling to sell at prices that are still down from their peak of the past decade. Also, some homeowners who have locked in low mortgage rates in recent years by refinancing may be reluctant to move now that rates are a little higher.

Comment by WalmartShrimpRage
2014-06-28 22:29:01

This seems like classic straw man. Entire article is propaganda to countract Boomer housing Hbomb.

The claim that they won’t still need SFH’s thrown out then shown not to be happening. But that doesnt mean downsizing is not happening, they can just be moving to smaller SFHs or cheaper SFHs in cheaper low cost areas.

Comment by Whac-A-Bubble™
2014-06-28 10:50:39

U.S. fertility plummets to record low
Study finds fewer teen pregnancies and women waiting longer to
American fertility has reached a record low, driven by falling birthrates among teens and women in their early 20s, the federal government says in a new report being released Thursday.

By Cheryl Wetzstein
The Washington Times
Wednesday, May 28, 2014

American fertility has reached a record low, driven by falling birthrates among teens and women in their early 20s, the federal government says in a new report being released Thursday.

The number of teen births in 2013 — 274,641 — was the lowest number ever reported for the United States, researchers said in their report on preliminary birth data for 2013.

Overall, America’s total fertility rate fell to just 1.86 births per woman, the lowest since 1986 and a 1 percent decrease from 2012. That figure puts the U.S. on the same course with many Western European nations and Japan, where the birth rate has fallen below what demographers call the “replacement rate,” usually around 2.1 births per woman, needed to keep a country’s population from falling. The U.S. last had a total fertility rate of 2.1 births in 2007.

With its new figure of 1.86, the United States looks like it will lag behind Australia (1.92), France (2.01), Sweden (1.91) and the United Kingdom (1.90) but have higher fertility than Brazil (1.81), China (1.66), Japan (1.41) and Russia (1.59), according to 2012 data from the World Bank.

In many of those countries, the governments have adopted public policies deliberately designed to encourage women to have more children.

Researchers say the striking drop in teen birth rates is a main driver in the shifting population numbers.

“The fact that it’s another historical low just cannot be underscored enough it really has dropped precipitously,” said Brady E. Hamilton, a report author and researcher at the National Center for Health Statistics.

Taken as a whole, the number of births in the United States in 2013 ticked up slightly to 3,957,577, about 5,000 more births than in 2012.

The changes in the overall fertility rate reflect a profound shift in U.S. family patterns, due in part to the trend of more women choosing to have their first baby later in life.

That trend — which has been going on for “quite some time” — affects childbearing because if a woman postpones her first baby, it can diminish the chance that she will have a second, said Mr. Hamilton.

Comment by Bill, just South of Irvine, CA
2014-06-28 15:31:38

My 30 year old niece is single and living at home. Never had a boyfriend. My 38 year old nephew is single and living at home. Never had a girlfriend.

And the niece is not lesbian and the nephew is not gay, at least from their social conservatism.

Two of my sisters have no kids. One was married before. I never became a father, but lived with a wonderful woman for three years.

My family is “part of the problem” - we are all college educated except one sister took equivalent courses in her health care field and my nephew dropped out of college.

Why? We really don’t know. We never discussed it. But I think partly it was because we never were pressured to get married and raise kids. There was no good reason to. I think that’s the reason - no good reason to.

Comment by Whac-A-Bubble™
2014-06-28 22:42:38

“part of the problem”

As a parent with libertarian leanings, I don’t look at it as “a problem” in the sense of people exercising their individual freedom to have a family or to live a single life; in fact, I see freedom to choose as one of the great strengths of life in America.

However, at a societal level, there are potential issues if the birth rate is below the replacement level. Are we going to become an immigrant-dependent society, given that we cannot breed fast enough to maintain the population? Who is gonna snap up all the Boomers’ empty nests if nobody is starting families?

(Comments wont nest below this level)
Comment by Whac-A-Bubble™
2014-06-28 10:52:45

Unless you are wealthy, having kids is currently a foolish financial choice in the US, as there is negative support for young families starting out in extant Federal Reserve asset price support policies.

Comment by Hi-Z
Comment by MightyMike
2014-06-28 12:39:54

Rand Paul Says Jesus Wouldn’t Like the GOP’s Taste for War

Justin Worland
June 27, 2014
    
Says Jesus was the “Prince of Peace”

Kentucky Republican Sen. Rand Paul condemned during a little-noticed interview what he described as his party’s eagerness to engage in international conflict, arguing that Jesus Christ “wasn’t really involved in the wars of his days.”

“Part of Republicans’ problems and, frankly, to tell you the truth, some in the evangelical Christian movement I think have appeared too eager for war,” Paul, a likely 2016 presidential candidate, told the Christian Broadcasting Network. “I think you need to remember that [Jesus] was the ‘Prince of Peace.’”

The April 2013 interview was getting renewed attention Friday after it was highlighted by the website Mother Jones. Paul’s more non-interventionist foreign policy has made him an enemy of Republican foreign policy hawks but a favorite of libertarians.

David Limbaugh, the brother of conservative talk-radio host Rush Limbaugh, was among the conservative commentators who expressed dismay at the remarks Friday.

“I pray there’s some explanation,” he wrote on Twitter.


Comment by Bill, just South of Irvine
2014-06-28 17:14:40

Heck, I am an atheist and i don’t have to believe in any spaghetti monster to be a noninterventionist.

Comment by Whac-A-Bubble™
2014-06-28 22:43:38

How would Jesus have liked the Democrats’ taste for war?

Comment by phony scandals
2014-06-28 13:05:38

Some of you may remember me talking about walking my dog Dozzer and passing houses that people lived in that had not made a mortgage payment in years. I remember one HBBer saying they hoped Dozzer took a big one on one particular serial refinancing victims lawn. That was probably back in 2009 or 2010.

Well Dozzer is 12 now and besides arthritis he has some condition that has him choking when he eats or drinks. It could be fixed with surgery but he’s 12+ and it just doesn’t make sense. So tomorow at 11:30 am I have to take my old friend who used to listen to me gripe about the Beats as we walked by their houses into the vet and say goodbye.

I will miss him.

Comment by jose canusi
2014-06-28 13:34:00

Jeff, my sympathies. I stayed up most of the night with my old bowser buddy the night before we took him to the vet for the last time.

Comment by Tarara Boomdea
2014-06-28 13:56:46

I just got back from the vet with my 14yo Lab. He has many ailments, and I asked if she could come to the house to euthanize him when the time comes (it most likely will be in the next couple of months.) She agreed and I am relieved. I will say a little prayer for you and Dozzer tomorrow.

Comment by Whac-A-Bubble™
2014-06-28 14:04:09

It’s a sad time in a dog owner’s life when you have to put them down. Take care.

P.S. Try to get him to unload one more dump on some deadbeat’s lawn before tomorrow if at all possible.

Comment by phony scandals
2014-06-28 16:31:39

Me and the Doze are gonna take one last short slow walk tonight and then chill on the family room floor.

Thank you all


Comment by RioAmericanInBrasil
2014-06-28 16:37:13

I’m sorry.

You might be able to find just a little comfort knowing you lived in a place to give a dog a decent life.

Unlike Rio. I love dogs but regret this is a place that is not really their place.


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Comment by Housing Analyst
2014-06-28 17:32:49

You’re a phoney Lola.

Comment by Ann Gogh
2014-06-28 16:32:58

Buh bye dozier, we will all miss you, ruff ruff!

Comment by sleepless_near_seattle
2014-06-28 16:50:07

Dang, phony Jeff,

Sorry to hear this. I remember you posting about him a month or so ago. A month ago we had to say goodbye to our best friend of 15 years. We had a traveling vet who was recommended by our vet do it in the comfort of home, so if not too late you might consider that approach. We bawled for two straight days afterward and were down for about a week. Very empty feeling in the house still.

Peace to you and Dozzer.

Comment by phony scandals
2014-06-28 17:53:51

“A month ago we had to say goodbye to our best friend of 15 years.”

“When they say a dog is man’s best friend, it’s easy to understand why it’s so difficult to lose a great dog. Losing your best friend is difficult.”

I am sorry for your loss


Comment by sleepless_near_seattle
2014-06-28 23:57:22

Thanks Jeff. My thoughts will be with you and your pal tomorrow.

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Comment by SV guy
2014-06-28 19:46:04

Sorry to hear about that Jeff.

We also had to put our Husky down this week. It’s hard.

Comment by phony scandals
2014-07-02 19:36:40

I am sorry for your loss


Comment by Neuromance
2014-06-28 21:30:20

It’s a tough thing, Saturday. Many of us have been there. Keep a calm and cheerful demeanor for your friend, as they are keenly aware of our emotional state. Walk with him as far as you can. Make a contribution to an animal charity in his name or make some other memorial. Best wishes for a smooth transition.

“The cat that only yesterday was a kitten is all too soon old and frail and sleeping in the sun. The young pup of boundless energy wakes up stiff and lame, the muzzle now gray. Deep down we somehow always knew this journey would end. We knew that if we gave our hearts they would be broken. But give them we must for it is all they ask in return. When the time comes, and the road curves ahead to a place we cannot see, we give one final gift and let them run on ahead — young and whole once more.

“Godspeed, good friend,” we say, until our journey comes full circle and our paths cross again.”



“Near this Spot
are deposited the Remains of one
who possessed Beauty without Vanity,
Strength without Insolence,
Courage without Ferocity,
and all the virtues of Man without his Vices.

This praise, which would be unmeaning Flattery
if inscribed over human Ashes,
is but a just tribute to the Memory of
Boatswain, a Dog
who was born in Newfoundland May 1803
and died at Newstead Nov. 18th, 1808″

- Epitaph to a Dog, by Lord Byron


Comment by Whac-A-Bubble™
2014-06-28 22:52:05

Dog owners tend to get as attached to these pets as to the humans in their lives — some times even more! I recall a cellist I used to work with who had a large dog whom he preferred as company over his spouse…not that he didn’t like his spouse, but the dog never argued and gave steadfast, unconditional love.

I went through the ordeal of losing a dog twice when I was a kid; maybe that is one reason I have never pushed hard to have a dog since I had kids of my own. I wouldn’t want to wish that pain of loss on my own children.

Peace to Dozzer and healing to his grieving family.

Comment by CA renter
2014-06-29 02:23:45

So sorry to hear about your dog, PS. :(

Best wishes to you and your family as you deal with your loss. It is so difficult when you lose a pet.

Comment by phony scandals
2014-06-29 10:14:31


Comment by Prime_Is_Contained
2014-06-29 16:20:26

Hey jeff, really sorry to hear about Dozzer. :-( :-( My condolences…

Comment by phony scandals
2014-06-29 18:20:46

Thanks Prime

Been a long tough day

Good night Doze sleep well

Comment by phony scandals
2014-06-30 12:51:26

“If there are no dogs in Heaven, then when I die I want to go where they went.” ~Will Rogers

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Comment by Prime_Is_Contained
2014-07-02 07:56:41

Brilliant. How could it be Heaven with no dogs there??

Comment by phony scandals
2014-07-04 04:55:22

“Godspeed, good friend,” we say, until our journey comes full circle and our paths cross again.”

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Comment by phony scandals
2014-07-03 05:09:41

“This soldier, I realized, must have had friends at home and in his regiment; yet he lay there deserted by all except his dog. I looked on, unmoved, at battles which decided the future of nations. Tearless, I had given orders which brought death to thousands. Yet here I was stirred, profoundly stirred, stirred to tears. And by what? By the grief of one dog.

Napoleon Bonaparte, on finding a dog beside the body of his dead master, licking his face and howling, on a moonlit field after a battle. Napoleon was haunted by this scene until his own death.”

Comment by Prime_Is_Contained
2014-07-04 12:36:09

Napoleon Bonaparte, on finding a dog beside the body of his dead master, licking his face and howling, on a moonlit field after a battle. Napoleon was haunted by this scene until his own death.”

Wow, that’s poignant.

Keep your chin up, jeff.

Comment by phony scandals
2014-07-04 11:34:13

I will be sad to see this go, I have been coming back to this all week.

I was right, I miss him terribly.

Comment by phony scandals
2014-07-06 08:18:32

It’s me Doze

Comment by phony scandals
2014-07-07 18:33:02

Goodnight Dozzer, I miss you.

Comment by phony scandals
2014-07-08 18:02:07

Home soon.

Comment by phony scandals
2014-07-11 15:39:38

Dozzer is home.

Comment by phony scandals
2014-07-11 18:12:42

Dozzer is home

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