Homelessness, Housing and the Future

Breitbart - Los Angeles County to Pay Private Homeowners to House Homeless. While you might think this is just being discussed in Los Angeles, it is not.

KFVE - Could homeowners be the answer to Hawaii's homeless crisis?

Los Angeles Daily News - On LA County’s remote north end, the homeless are stuck. Is hope on the horizon?

Some simple little facts to consider. During the housing boom (2003 - 2007) people began building bigger and bigger houses even though families were getting smaller and smaller. While touring new developments at that time I began to say that they looked like boarding houses and that is what they will become.

Imagine paying people $75,000 to build a small home in the back of their property, what is the effect? Well, first and foremost it means that the idea of zoning for single family residences is destroyed. Once destroyed, people will be allowed to rent out rooms, again, a violation of the zoning regarding single family residences. Trust me, this "pilot program" is intended to fail and instead people will get paid to rent out rooms and it will start in the Antelope Valley and Moreno Valley.

If you want to see what is coming, start by looking at the infrastructure that is being built.

Bank of America $17 Billion Payment to Investors

This is going to be a short post, just something to think about. The banks have been fined billions by the government; but, just about all of that money went to pay off investors who bought mortgage backed securities. The banks gave out loans for more than they were worth and sold the loans. Now they are being forced to pay back the investors; but, the property owners get almost nothing. The gamblers get paid and the people who were duped into outrageous debt get nothing. Why didn't the property owners get paid first or at all? Because you don't matter, the same reason nobody went to jail for fraud in the banking industry or for fixing markets. They pay fines; but, not to the consumers, not to you and I. Oh, and their fines are tax deductible, if you steal someone's purse or rob their home, do you get to deduct court fines from your taxes. I bet not.

How the Establishment Continues to Rig the Game.

This is going to be a collection of news stories that I haven't had a chance to get to yet.

Huffington Post - Donald Trump Prefers His Steak Well Done, AKA The Worst Possible Way.  I like starting with this one. The propaganda machine is on full tilt against Trump; but, this article is fanatical in it's stupidity. It basically says Trump is a bad person because he likes his steak well done. Wow, now that is what I call insane. Next they will be saying he is bad because he flosses his teeth.

Fox News - No Right to Rent? Cities barring property owners from renting out.  If you think about who this benefits you will understand why cities have passes laws restricting who can rent out a home. Yep, it benefits apartment building owners. Keep an eye on this because they are going to go after mom and pop rental buildings next.

CNBC - Here's how the GOP could stop Trump AND Clinton.  Basically the article promotes a third party candidate just so neither Trump nor Clinton could get a majority and that would allow the House of Representatives to choose the President and the Senate to choose the Vice President. CNBC is literally saying that the will of the voters should be superseded by a congress that has less than a 10% approval rating.

YouTube - Harper Suspends Parliament Giving Him All Power. The title of the video is actually wrong, it was the Queen of England's representative that closed the Parliament and did not allow the Canadian legislature vote on ousting their Prime Minister. Another example of how the vote of the people does not meet the wishes of the wealthy so the vote is taken away.

YouTube - EU faces existential crisis as democracy becomes contagious - UKIP Leader Nigel Farage.  Yes, Europe's laws are voted on by people who frequently were not chosen by the people.

Yahoo - Reuters - Uber seeking to buy self-driving cars: source.  Yes, Uber is seeking to buy 100,000 self driving cars so that it doesn't have to pay for drivers. I really enjoy listening to people who try to tell me that this will not happen in their lifetime.

Investor's Business Daily - Blame Minimum Wage, Not Carl’s Jr. CEO, For Automated Restaurants. Face it, employees are not wanted, go back and read my post on "What's Going On". Even slavery would not stop automation from taking away jobs, if you doubt it just look to China.

Fortune -  Conservatives Grasp For a Plan to Stop Trump. Another article calling for letting congress pick your next President and Vice President. We will be seeing more of these because the wealthy don't like the people deciding anything.

The Economist - Top Ten Global Risks.  This is from an English publication and it claims that if we elect Trump as President it would be one of the top ten threats to globalism.

Lies, Liars and the Pimpernel's Future

The Pimpernel is intending on retiring late this year. I plan on retiring from my job and moving back to the desert. A different part of the desert; but, the desert still. I am seriously considering doing a AM radio talk show at a small radio station in the desert and doing it using my real name and explaining things that I have seen, know about and cannot talk about without revealing my real name.

Would you listen to the old Pimpernel talk on the radio (the station also produces internet podcasts for the radio shows)? Oh, no the Pimpernel would not get paid unless I played commercial; but, then again, I don't get paid for preaching either and I have never made a dime form this blog or monetized it. I would consider selling commercial time on a radio show; but, would be really picky about to whom. I think I would use all the money for more airtime. I am preparing a budget to determine how man hours I can afford to be on the air. I am thinking one hour a week at the 2 am slot.

Here are the kind of things I am thinking of discussing:

MyWay - GOP seeks coverage choices in health law they hate. So members of the Republican party that voted against "Obamacare" are trying to use it to help small businesses while still claiming they will see it eliminated next year. It is all theater and lies.

The Motley Fool - Mortgage Resets Are Beginning, and Things Could Get Ugly. The article is complete lies, let me give you a quote from it.

"Which institutions hold these loans? Of the 10 major servicers involved with HAMP, Bank of America Corp. (NYSE: BAC ) , JPMorgan Chase & Co. (NYSE: JPM ) and Wells Fargo (NYSE: WFC ) are in the top five. At the end of 2013, redefaults for each bank associated with HAMP loans was 31% for B of A, 23% for JPMorgan, and 24% for Wells. Ocwen Loan Servicing and Nationstar Mortgage, the other two servicers in the top five, each had redefault rates of 30% and 26%, respectively. Can they expect a whole lot more in the next few years? It certainly seems like it."

The first sentence is contradictory because it is a lie. They ask which banks hold the mortgage loans, the real answer is none. Fannie Mae and Freddie Mac and the Federal Reserve hold all the mortgage loans, not the banks. You doubt me; but, read the next sentence in the quote. It says that these banks are loan servicers because that is all they are. Your mortgage is owned by the government which owns Fannie Mae and Freddie Mac, not by the banks.

Bloomberg - Fannie-Freddie Elimination Model in Apartments: Mortgages. Read through the article and remember that I wrote about this a month or so ago. People want to have the government sell off Fannie Mae and Freddie Mac; but, keep 90% of it's liabilities with the government. They are proposing outright theft of government assets by selling the assets of and retaining all the liability.

Random News and Waiting for My First Grandchild

My eldest is pregnant and a week overdue. It is quite frustrating just waiting. Now, to the news.

New York Times - In Search of a Stable Electronic Currency. When I was an undergraduate in college studying for my degree in Political Science, one of my teachers required us to read either the New York Times everyday or the Christian Science Monitor (he was not of that faith), he claimed they were the two best and most objective newspapers. He required that we read it everyday from cover to cover. He would then give us tests which included issues that were in all the different sections.

The above article is interesting in that it discusses how Bitcoin will fail; but, has led the way in showing us how to adapt to an international electronic currency. Here is a quote from the article, "And there could be a “trills” unit — a concept that Mark Kamstra of York University and I have been advocating — that represents one trillionth of a country’s most recently estimated annual G.D.P. There should also be a unit that grows or retreats with per-capita daily consumption. This could be used for pension and Social Security payments as a form of intergenerational risk-sharing: The idea is that payments to older people would rise and fall with overall consumption. With many kinds of baskets, it will be easier to set prices and make contracts that are sensible for the long term."

Remember that quote, in the end, in my opinion, Bitcoin has been nothing more than a dry run for instituting and international, GDP based currency exchange and I have said that more than once.

Huffington Post - Wall Street Has Found Its Latest Dangerous Financial Product, Activists Warn. The story is pretty simple, hedge funds and investors have been buying up all the houses and paying cash. The article is complaining that is keeping good people from getting mortgages and buying the houses themselves and forces people into rentals. That is garbage. The real propaganda in the article is to get you to believe that the companies that own these homes are less likely to take care of them once they are rented out. I live in a rental owned by a family I know, it is a small building and fairly old. There are lots of families and people that own rental properties, I owned one. It can be a fairly passive income for retirees. What is coming is that increased pressures will be put on small owners of rental properties and they will be forced to sell their properties to these hedge funds and larger investors. The real beneficiary will be the federal government which owns Fannie Mae and Freddie Mac as they own 70% or so of all the mortgages and the Federal Reserve. They are going to continue putting more and more regulations on rental properties, watch and see.

Yahoo - GMA - $10M Gold Coin Hoard Found in Yard May Have Been Stolen From Mint. This article is just amusing and gets people so emotional. A couple in California claims to have "found" $10,000,000 worth of gold coins. When this came up, I told some people that in the end the couple would not be allowed to keep any of the coins and guess what, it looks like they won't get to keep any of the coins as they "might" have been stolen back in the 1800s.

Here is the real issue, if you own gold you better be able to prove how you obtained it. A few years back the law was changed and any sale of gold valued at more than %500 must be reported to the federal government. None of the purveyors of fear of an economic crash who also sell gold bother telling people that, I don't sell anything. Don't waste your time buying gold and there will still be a complete breakdown of the current economic system which will lead to a new financial model that is all electronic and based on a countries Gross Domestic Product.

Los Angeles Daily News - Los Angeles City Council votes to regulate e-cigarettes as strictly as tobacco. It should be apparent that this type of regulation is not about harming others, it is about controlling what you do outside. E-cigarettes are not tobacco and they don't burn and they don't have a secondhand effect.

Wired - The Next Big Thing You Missed: How Starbucks Could Replace Your Bank. Here is what you need to take away from the article, traditional banking will be dead once we go to all electronic currencies. The real question is what will replace it for the average person and who loses when the big banks finally fail completely and are broken up into little local banks.

Mail Online - Turn your entire room into a SCREEN: Microsoft tool lets you browse the web and beam videos onto the walls of your home. I wrote about this over a year ago. Just imagine what kids will be like when they grow up in a safe, virtual world. They will be completely out of touch with real world risks and consequences.

Huffington Post - Obamacare Just Made Americans Richer Without Anyone Noticing. My first response is who cares as it is not about increasing the GDP, it is about making sure everyone has health insurance if they are to have access to healthcare. The first line is my favorite line, "Glenn Beck once said Obamacare would mean "the end of prosperity in America forever." LOL. Most of Europe and Canada have true government healthcare, we just force you to buy insurance, yet apparently that is going to prevent us from making money. Think about that, if you get healthcare, it means it costs your employer money. You know why, because they can't steal it because you will notice when you don't have your pills.

Huffington Post - Warren Buffett: Here's What We Need More Than A Minimum Wage Hike. I am not sure if I agree with him, he believes we should raise the tax deduction for low income earners instead of increasing the minimum wage. I think I like my idea better, what if individuals didn't have to pay anymore in taxes as a percentage of their income than companies pay or investments pay in taxes? What if rather than getting tax breaks and subsidies for corporations that outsource, we only gave companies tax breaks for investments they made in America and jobs they created in America?

Daily Beast - British Prime Minister’s Child Porn Adviser Arrested Over Child Porn. The Jimmy Saville case has exposed the political support for child molesters in Britain. There are many questions to be asked, why were these things covered up for so long, how can they be committed by the most powerful people in government and finance and why is this all coming out now; but, the most important question is how will these revelations be used to change societies? The end game explains the purpose to the other questions.

Well, that all folks, have a great week.

Where Did the Quantitative Easing (QE) Money Go?

Over a year ago, the Federal Reserve began QE3 which involved the purchase of Treasury Bonds and Mortgage backed securities. The securities were bought from the mega banks, this is public knowledge and I have written about it before; but, I forgot to ask the next question. Banks had hundreds of billions of dollars in mortgages and mortgage backed securities that were considered "toxic" because the loans that backed up these things will not and cannot be paid by the people who took them out. What I am talking about is sub-prime and other mortgages that were taken out by people who lost their jobs, had anticipated an increase in their house valuations or had loans which started low and increased as their interest rates reset or adjusted up after the first few years.

Having said all that, someone recently brought up a brilliant question. What did the banks do with the hundreds of billions of dollars they received from the Federal Reserve after they sold their mortgages to them? What one person is claiming is that the banks used those funds to buy treasury bonds. When the housing market crashed, a friend and I had a communication with the head of real estate for the Rockefeller organization. The issue involved the purchase of a large number of houses valued at over a billion dollars and the Rockefeller organization wanted to purchase the collection of properties and their stated price was 35 cents on the dollar. The deal did not go through. That dollar amount is what stuck in my head, I concluded that they had a reason for the number had chosen. Now, here is the question, what discount did the federal reserve get when they purchased the same mortgages?

Why is this important? Well, lets start with this, private investors were only willing to pay 35 cents on the dollar. The fact that it was the Rockefeller organization is not surprising as the family had made untold amounts of their income during the depression after buying all the houses and then renting them out to the people they bought them from. It would make sense for the wealthy to buy properties during a down economy; but, they did not because the Federal Reserve did. We must assume that the Federal Reserve paid more than banks would have been willing to pay for the same properties. Why would they pay more than market rates?

Let me simplify. If you owned mortgage backed securities, you would only sell them to the highest bidder, yet, the highest bidder was consistently the Federal Reserve. Are they just suckers and didn't care what they paid for them? What if the Federal Reserve didn't buy them at a discount and bought them at their face value? What would that mean and why do it? Nobody pays a new car price to buy a used car unless that is a collectors car and toxic mortgages are not a collectors item. Why would the Federal Reserve overpay for mortgage backed securities?

This is where the question I had forgotten to ask comes in. Who did they pay and where was the money spent? An example would be JP Morgan. JP Morgan sold billions of dollars of mortgage backed securities to the Federal Reserve; but, where did the money go once it got to JP Morgan? If the person I heard was correct, the big banks used that money to buy treasury bonds. Sure some went to bonuses for bankers and some went out in dividends; but, the amount is miniscule compared to the total. If the person I heard is correct, the banks used that money to buy treasury bonds. This is also interesting as banks are now required to keep more hard assets and cash on hand, I bet that treasury bonds count too.

If we look a little deeper we begin to ask ourselves another question. What happens to the banks if the government defaults on those treasury bonds? A while back I wrote about how a European country (Italy or France as I recall) was selling government bonds with a negative interest rate. At the time it made no sense to most of us; but, the bonds were sold. If we want an example of a government default, all we have to do is look to Detroit. Bondholders got a haircut and pensioners got a 90% reduction in their payments. This is why state governments are looking to cut pensions, this is the game.

If states and local governments bought mortgage backed securities (as Detroit did)that were sold at inflated prices, why should the organizations that sold them to the governments be paid off when the bankruptcies in municipalities continue? If JP Morgan sold your state a billion dollars in mortgage backed securities and they lost 70% their value, while at the same time JP Morgan owned a billion dollars of your state's bonds, be paid for the state bonds at full value? Read that as many times as necessary to understand what I just asked.

JP Morgan sold mortgage backed securities to states, local municipalities and public pensions that it then bet against. They then took that money and bought state and local bonds. They expect the states and municipalities to pay them on the bonds at 100% and not have to pay the states and municipalities for the hundreds of billions of dollars they lost by buying the mortgage backed securities from them. The banks would like to see the difference paid for by raiding public pensions to pay them.

I will move onto other things now.

Yahoo - Reuters - Thirteen billboards, one paint-shop worker helped defeat union at VW plant in Chattanooga. My regular readers should be able to read the article and dissect the lies by themselves; but, I will give a quick shot at it. The title alone tells you the authors perspective, the UAW was defeated by a few billboards and ONE paint shop worker. It doesn't matter that the governor of the state told people that they would lose their jobs if they voted for collective bargaining and contracts with employees, it didn't matter that Volkswagen itself said that they were okay with unionization. Nope, it was someone in the paint shop that is responsible for people voting against having a united say in their salary negotiations. It does not matter if you are for or against unions, the question is whether or not the article and the statements are just garbage and propaganda. You can agree with the outcome; but, understand when you are being lied to.

When Foreclosures Will Increase

We all know that there have been foreclosures across the United States; but, millions are still living in homes which they have not paid a mortgage for in a couple of years. Why haven't the banks foreclosed? The answer is because they have been busy selling their mortgages to the government and the Federal Reserve. That is what Quantitative Easing 3 has been about.

The big banks began giving loans to anyone and everyone knowing that they could not pay going back to 2001 or so. In 2007 it became apparent that people could not pay back their loans and that housing prices were unsustainable. The result was housing prices depreciating as much as 50%. Banks that were holding those loans went bankrupt and the government ended up having to take tax payer funds to bail them out. That is the starting point.

In order to take these loans off of the balance sheets of the banks, the Federal Reserve began buying the mortgage back securities from the banks. Now that they have purchased most of the mortgages, there is no longer a need to keep the market value up of these houses. When the balance sheet of the Federal Reserve is adjusted down it will be taxes that pay them back.

In short, banks made bad loans, profited greatly from it and then sold those bad loans to the government and Federal Reserve. Once the Federal Reserve stops buying these mortgages it will be because all of this debt will now be on the government. At that point, Fannie Mae and Freddie Mac will accelerate foreclosures and allow the balance sheet be be marked to market, to actually reflect the odds of getting paid back and the difference will be made up in taxes.

So, what does this mean for the housing market? Well, it means that home values will plummet again. This was hedged somewhat by the fact that most housing purchases in the past couple of years were paid for in cash by foreigners and hedge funds. QE3 was designed specifically to remove overpriced housing mortgages from the banks and with that now complete the tapering has begun. Once the tapering is complete the foreclosures can be completed and the real estate market values will adjust based on those who purchase those homes.

Lots of Financial Stuff and Some History To Remember

YouTube - Why Is America in Decline? Chris Hedges on the U.S. Empire & Death of the Liberal Class (2012). A very long video by a fascinating person who explains what is happening in the world. He hits upon many issues I have discussed in the past and I am not going to bother summarizing. It is just a link.

Yahoo - Reuters - Stronger Pacific winds explain global warming hiatus: study. We all know global warming is a lie by now.

Yahoo - New York Times - Chinese Official Made Job Plea to JPMorgan Chase Chief. It speaks for itself.

Market Watch - U.S. to suspend pension, retirement funding: Lew.

Bloomberg - Housing Bubble -- or Bunk?. This article from 2005 was by "Market Specialists" and it denied that a nationwide housing market could collapse. It attempts to claim that housing price collapses can only occur if unemployment rises or wages drop while ignoring the fact that wages had not risen and all the increases in employment were in the housing industry.

Mortgage News Daily - Housing Bubble To Bust? FDIC Certainly Hopes Not. Another article from 2005 before the bust. An FDIC report that said that nationwide housing bubbles just don't happen and that is true, unless they are intentional.

Washington Post - Bernanke: There's No Housing Bubble to Go Bust. Again in 2005, our most trusted economists lying to us. The head of the federal reserve said there was NO housing bubble.

Bloomberg - Fed Officials Saw Housing Bubble in 2005, Didn't Alter Policy. Get it, they lied back in the day because they did see what was coming and their own documents prove it.

The Economist - The Global Housing Bubble. The housing bubble was global as this article from 2005 describes; but, Bernanke and others said that all real estate bubbles were local, they lied.

CBS - Housing Bubble Is A Local Matter.

Now, if they lied to you about the housing bubble why do you trust them when they say the economy is okay today? You cannot trust these people and that is, in the end, the saddest thing of all. They no longer care if we believe them. Please do not ask me how to avoid the coming economic problems, ask me how we recover from it in the best way possible and avoid marching in the direction that those in charge want us to so they can take even more advantage of us.