Offshore Inn for International Real Estate, Overseas Jobs, Asset Protection, Expatriate Resources and Overseas Retirement
It is a peculiar irony. A year ago, the the UK’s Inland Revenue began a crackdown on offshore savings. Banks operating out of the Channel Islands and the Isle of Man had to hand over details of British customers, and depositors who confessed were rewarded with an amnesty. Thousands did and many must have given up on offshore savings. Inadvertently, the taxman’s crackdown must have saved some depositors from the collapse of the offshore subsidaries of Icelandic banks.
Thousands were not so lucky and could now lose most of their savings …
Consider if you will be a sole proprietorship, partnership or corporation.
‘You’re so lucky, being able to work abroad.’ I’ve forgotten how many times I’ve heard that statement.
If you have assets, you are most likely a target. When your assets are visible, you are the bullseye.
Do you need a job? Just got a question? Pop it in here and you’ll get an answer from our Inn Team.
Tip the scales in your favour, protect your home and family with asset protection programmes for partnerships, corporations and individuals.
New Jersey Governor Chris Christie is doing what he was elected to do, govern. And that means playing hardball with union termites who refuse to give an inch to help the state out of budget problems primarily caused by untenable union promises, union wages, and union pensions.
When unions refused to cooperate, Christie decided to take the next logical step, to privatize jobs. Please consider New Jersey plans to privatize state jobs
Gov. Chris Christie today will create a commission to privatize as many as 2,000 state jobs beginning next January, officials said Wednesday night.As he grapples with an $11 billion deficit in the budget he will present on Tuesday, Christie is also considering invoking the Disaster Control Act to suspend Civil Service rules to make it easier for him to lay off higher-paid workers, according to two administration officials.
The Republican governor today plans to sign an executive order creating the task force to cut the size and cost of the state payroll. Three officials familiar with his plans last night said the commission will identify which jobs or agencies would be operated by the private sector and how that would be accomplished. The officials declined to be named ahead of the announcement.
Privatizing jobs would require layoffs. By beginning them in January, Christie would not be subject to a deal between former Gov. Jon Corzine and state worker unions that would require the state to pay millions in raises to remaining workers if he orders layoffs before then.
Suspending civil service would allow Christie to order layoffs of higher-paid unionized state employees with many years of service, rather than the usual practice of layoffs that affect lower-paid new employees first, the officials said. Currently, workers with more seniority can “bump” less-experienced workers from their jobs.
The privatization effort deals a blow to state worker unions just 48 hours after Christie publicly acknowledged he is bound by the agreement struck by Corzine where state workers would get two 3.5 percent raises in the coming fiscal year Ð one in July and one in January. They deferred one raise and took 10 unpaid furlough days last year in exchange for the no-layoff pledge.
Two days ago when I read that the Union refused to give an inch on a ridiculous contract negotiated by former governor Corzine, I was delighted. The reason is I was pretty sure how Christie would respond. Today he hit a home run.
Moreover, his goal should be to privatize every government job he can. Why stop at 2,000?
Where’s The Leadership?
It’s too bad other governors refuse to follow Christie’s lead by cutting expenses. I talked about that previously in Missouri Budget Overstates Revenues By Up To $1 billion; Indiana Revenue Falls Short; Budget Battles In Washington; Budget Gaps In Kansas
Sadly, the governors in Missouri, Kansas, Washington, and Indiana fail to see the problem or are still looking for “tricks” to postpone dealing with those problems. There are no tricks left in the bag, yet states keep looking for tricks.
Add Virginia to the list of states playing trick-or-treat.
Federally Funded Ticketing Blitz In Virginia
Inquiring minds are reading Virginia State Police Help With Budget Crunch.
A federally funded ticketing blitz in the state of Virginia landed a total of 6996 traffic tickets this weekend. The blitz, dubbed “Operation Air, Land & Speed” coincided with frantic efforts by state officials to close a$2.2 billion budget deficit. Supervisors ordered state troopers to saturate Interstates 81 and 95 to issue as many tickets as humanly possible over the space of two days.Activists with the National Motorists Association pointed out that enforcement efforts may have concentrated on areas where speed limits are expected to rise to 70 MPH following Governor Bob McDonnell’s signature on legislation raising the state’s maximum speed limit (view law). This would mean a significant number of tickets were issued for conduct that will be perfectly legal in a matter of months. The group also indicated that state police tactics may run afoul of state law.
Under the federal grant application process, state officials explained that they would pay officers overtime — at least one-and-a-half times their normal salary — to participate. This special reward for ticketing operation participants appears to violate the spirit of state law.
Message To Virginia Governor
Hello, Bob McDonnell, you are not even in the ballpark with what needs to be done. How about showing some leadership rather that resorting to traffic blitzes to shore up the budget? All you are doing is postponing tackling the real problem, a bloated state budget.
If the state police have nothing better to do than harass drivers in areas where the speeding limit is set to go up anyway, then Virginia should get rid of some of that police force, reducing the budget at the same time.
Brass Balls In Las Vegas
Finally! The mayor of a major city is looking into doing what needs to be done. Please consider Las Vegas Mayor Says City Should Fire All Workers
If Las Vegas can’t get the desired wage concessions out of its employee unions, the city should simply fire everyone and offer to rehire them to work a shorter work week, Mayor Oscar Goodman said Wednesday.“I’m trying to save jobs. I really am,” Goodman said. “If it’s a strong-arm tactic, so be it. “If it’s legal, I’m going to propose it to the council. I think it’s the only way we’re going to save jobs.”
Goodman ordered the city attorney to study the possibility.
The idea didn’t go well with the unions. Several union presidents went so far as to call the mayor a bully. And Councilman Ricki Barlow also said he disagreed with the mayor.
The city faces a $70 million budget hole to fill and most likely a $40 million deficit in the next fiscal year, and the proposed solution to that hasn’t changed — all employees, Goodman said, should forgo their scheduled raises and accept 8 percent pay cuts in each of the next two years.
Or, under his fire-and-rehire plan, a new 37.5-hour workweek would trim costs 6.25 percent, and a 36-hour week would cut costs 10 percent, he said.
“I’ve never been as severely disappointed as this situation has caused me to be,” Goodman said about the unions being unwilling to open their contracts and accept needed changes.
Goodman also called for a study of whether the city should privatize its ambulance services, noting that his fire-them-all approach isn’t applicable to public safety employees.
Hello Mayor Goodman, you have the right idea, so just do it. And when you hire those workers back, privatize every one of the jobs, including police and fire. Don’t wimp out by privatizing just ambulance services. It’s time to show some brass balls.
Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
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Any economists blaming snow for recent weekly claims reports need to search for additional excuses. Once again, today’s numbers appear like reporting in the movie Groundhog Day.
Please consider the Unemployment Weekly Claims Report for March 11, 2010.
In the week ending March 6, the advance figure for seasonally adjusted initial claims was 462,000, a decrease of 6,000 from the previous week’s revised figure of 468,000. The 4-week moving average was 475,500, an increase of 5,000 from the previous week’s revised average of 470,500.
Weekly Unemployment Claims
The weekly claims numbers are volatile so it’s best to focus on the trend in the 4-week moving average. That 4-week average has not show any improvement for quite some time.
4-Week Moving Average of Initial Claims
The 4-week moving average is still near the peak results of the last two recessions. It’s important to note those are raw number, not population adjusted. Nonetheless, the numbers do indicate broad weakness.
4-Week Moving Average of Initial Claims Since 2007
4-Week Moving Average of Initial Claims Detail
The 4-week moving average of claims for the last four weeks is about where it was on December 5, 2009. By this measure, the recovery has stalled. For more on jobs, please see Bragging About Census Hiring Starts Already; I’ll Take The Under.
Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
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Inquiring minds are reading Miami-Dade hospital system nears insolvency.
The major hospital network Miami relies on for trauma care is close to insolvency and could be cut off by suppliers. Executives for Jackson Health System surprised its governing board Tuesday by saying the nonprofit is near or already in a “death spiral” as it runs low on cash.Chief Operating Officer David Small says any day he could hear from a surgeon without enough supplies to operate. The hospital system is the only Level 1 trauma center set up to provide emergency care around the clock in Miami-Dade, which is Florida’s most populous county and the 8th largest in the nation.
The hospital system needs a $67 million advance from the county to avoid coming within a day and a half of operating cash by April 5.
County responsible for paying Jackson’s union workers
Here’s an interesting highlight. The Miami-Dade attorney says County responsible for paying Jackson’s union workers.
If the Jackson Health System runs out of cash, the county would be responsible for paying Jackson’s 10,500 union workers, but not necessarily the other 1,500 employees, according to a legal analysis by County Attorney R.A. Cuevas Jr.It’s unclear exactly how big a tab that might be, but it would be a huge chunk of the $86 million of salaries and benefits that the public hospital system spends each month. At present, Jackson is expected to run out of cash in May or June unless drastic cuts are made.
This revelation on the county’s responsibility comes just before a special meeting scheduled for Wednesday by the Miami-Dade County Commission “to really understand the issues . . . being faced by the community’s safety net hospital,” according to the memo from Chairman Dennis C. Moss, who ordered the meeting.
Cuevas’ memo explores many issues in the relationship between Jackson and the county and raises the possibility that Gov. Charlie Crist might set up an oversight panel to administer the financially troubled institution, much the same way that Gov. Lawton Chiles created a financial emergencies board in 1996 to get the city of Miami back on track.
Jackson Chief Executive Eneida Roldan is trying to find ways to get faster and lower costs, but last week she announced she was putting a 45-day moratorium on job cuts, meaning it would likely be May before any major cost-cutting takes place.
The county meanwhile is battling its own budget woes, needing to find another $48 million in cuts this fiscal year, making it extremely difficult to find more money for Jackson.
Cascading Bankruptcies
Read the last sentence in the above article above again. It highlights the problems of unions dumping on cities dumping on counties. The only solution is to get rid of unions, taxpayer supported defined benefit pension plans, and taxpayers supported salaries well above what the private sector makes.
As I said years ago, I fully expect several counties in Florida to go bankrupt. Moreover, I expect many cities in many states to do the same. The only way out is for unions to voluntarily agree to dramatic cuts in wages and benefits. However, as noted in Moorestown New Jersey Unions Highlight Union Arrogance, the odds of that happening in mass are slim.
Ironically, this depression is bound to unwind the devastatingly parasitic measures FDR used to combat the last depression.
Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List
Report
In a scene that I expect to play out in every city across the country, Unions won’t reopen talks in Moorestown New Jersey.
Township officials expressed frustration that several unions representing Moorestown government workers have not agreed to reopen contract negotiations.Last month, township council asked the unions to consider making wage and health benefit concessions this year even though they have contracts that continue through 2012 and guarantee annual pay raises of 3.75 percent.
At Monday night’s council meeting, Township Manager Christopher Schultz disclosed to the public the specifics of council proposals to the unions — a wage freeze and a payroll contribution to health care benefits to help cut costs to the township.
As of Monday night’s deadline to respond, township officials said none of the unions had agreed to reopen negotiations.
“It’s more than frustrating,” said Councilman Greg Gallo. “It’s irresponsible and it shows tremendous shortsightedness and, frankly, I think it shows a disrespect to the taxpayers and to council to not even enter into a conversation. We respect the fact that they have existing contracts, but the world has changed and we are living in extraordinary times.”
“The membership has decided not to open up the contract at this time, but we understand the township is facing economic pressure,” said CWA local President Adam Leibtag.
For the current contract reached in August 2008, he said the union made concessions that included an increase from $10 to $15 in doctor’s visit co-pays.
Blatant Union Arrogance
It is the height of arrogance and stupidity to brag about concessions like a $5 increase in copays made in 2008. Councilman Greg Gallo hits the nail on the head with “It’s irresponsible and it shows tremendous shortsightedness and, frankly, I think it shows a disrespect to the taxpayers and to council to not even enter into a conversation.”
I am thankful for that shortsightedness actually. Cities will be forced to realize what leaches unions are.
The correct solution, and the only solution is to get rid of union pestilence. That is easy to accomplish by privatizing every job, including the fire and police departments, the latter to the sheriffs association.
Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
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In a headline trumpeting the wrong thing, Bloomberg is reporting Unemployment Decreased in Nine U.S. States in January.
The unemployment rate decreased in nine U.S. states in January and climbed in 30, signaling the thawing of the labor market is not broad-based.The jobless rate in Michigan showed the biggest drop, falling to 14.3 percent, still the highest in the nation, from 14.5 percent in December, according to figures issued today by the Labor Department in Washington. New York and New Jersey were among eight states where unemployment decreased by a tenth of a point.
A national unemployment projected to average 9.8 percent this year signals state budgets will be strained by decreases in tax revenue and rising jobless insurance payments. The loss of 8.4 million jobs since the recession began in December 2007 means the labor market in the world’s largest economy will take years to rebound.
“This is a recovery that’s really kind of concentrated,” said Steven Cochrane, director of regional economics at Moody’s Economy.com in West Chester, Pennsylvania. “It still portends weakness in income-tax revenue and sales-tax revenue into fiscal year 2011.”
Unemployment in the Detroit area, home to General Motors Co. and Ford Motor Co., dropped to 15.3 percent from 16 percent in December, contributing to the decrease in Michigan’s jobless rate.
States showing the most improvement in coming months will probably be those with a large manufacturing base, said Moody’s Economy.com’s Cochrane. The need to rebuild inventories and growing exports is propelling a factory rebound that will help some parts of the country over others, he said.
Unemployment in California, Florida, Georgia, North and South Carolina and the District of Columbia climbed to the highest levels since records began in 1976.
Regional and State Report
With that backdrop let’s take a look at the actual data from the BLS Regional and State Employment and Unemployment Report for January 2010.
Thirty states and the District of Columbia recorded over-the-month unemployment rate increases, 9 states registered rate decreases, and 11 states had no rate change, the U.S. Bureau of Labor Statistics reported today. Over the year, jobless rates increased in all 50 states and the District of Columbia. The national unemployment rate fell from 10.0 percent in December to 9.7 percent in January, but was up from 7.7 percent a year earlier.In January, nonfarm payroll employment increased in 31 states and the District of Columbia, decreased in 18 states, and remained unchanged in 1 state. The largest over-the-month increase in employment occurred in California (+32,500), followed by Illinois (+26,000), New York (+25,500), Washington (+18,900), and Minnesota (+15,600).
State Unemployment (Seasonally Adjusted)
Michigan again recorded the highest unemployment rate among the states, 14.3 percent in January. The states with the next highest rates were Nevada, 13.0 percent; Rhode Island, 12.7 percent; South Carolina, 12.6 percent; and California, 12.5 percent. North Dakota continued to register the lowest jobless rate, 4.2 percent in January, followed by Nebraska and South Dakota, 4.6 and 4.8 percent, respectively. The rates in California and South Carolina set new series highs, as did the rates in three other states: Florida (11.9 percent), Georgia (10.4 percent), and North Carolina (11.1 percent). The rate in the District of Columbia (12.0 percent) also set a new series high.
Six states reported statistically significant over-the-month unemployment rate increases in January. New Mexico experienced the largest of these (+0.3 percentage point), followed by California, Florida, Idaho, and Utah (+0.2 point each) and Maryland (+0.1 point). The remaining 44 states and the District of Columbia registered jobless rates that were not appreciably different from those of a month earlier, though some had changes that were at least as large numerically as the significant changes.
West Virginia and Nevada recorded the largest jobless rate increases from January 2009 (+3.5 and +3.4 percentage points, respectively). Six other states reported rate increases of 3.0 percentage points or more: Florida, Illinois, and Wyoming (+3.2 points each), Rhode Island (+3.1 points), and Alabama and Michigan (+3.0 points each). The District of Columbia also registered a large over-the-year unemployment rate increase (+3.6 percentage points). Thirty-five additional states had smaller, but also statistically significant, rate increases. The remaining seven states reported jobless rates that were not appreciably different from those of a year earlier.
Unemployment Rates By State
click on chart for sharper image
Percentage Change Year Over Year
click on chart for sharper image
Things are improving a bit in Michigan while climbing to new highs in California, Florida, Georgia, North and South Carolina and the District of Columbia.
Note that California was the state adding the most jobs. Employment just did not increase by enough relative to those seeking jobs.
These numbers show how shaky the “recovery” is, especially with huge budget concerns and layoffs coming in most states.
Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
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Instead of fighting jihad in Somalia by supporting the weak transitional government, the United States would have more success focusing on humanitarian aid and development, says democracy and governance expert Bronwyn Bruton.
Israeli Ministry of Defense adviser Uri Lubrani’s opinion that supporting Iranian opposition is a better policy than considering a nuclear strike has gained momentum in Israeli policy cirlces, the Wall Street Journal reports.
Please consider this one sentence video clip from House Speaker Nancy Pelosi.
http://www.youtube.com/watch?v=KoE1R-xH5To
“We have to pass the health care bill so that you can find out what is in it.” That unfortunately is the sad state of affairs, not just with healthcare, but with virtually any bill passed by Congress.
The only people who know what is in these bills are the lobbyists who write them.
Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List
Fresh on the heels of a snow job where Bernanke warned economists to disregard effects that did not happen (and anyone doing any semblance of research should have known would not happen) we now see media trumpeting up census hiring as if it was not temporary.
In case you missed the snow job analysis please see …
Having expected to see job losses up to 220,000 in last Friday’s report, economists have now gone the other direction trumpeting part-time census jobs that will vanish by June or July.
Census Hiring Hype
Please consider this unthinking headline Obama Job Losses May Turn on 300,000 March Payrolls.
The U.S. may add as many as 300,000 jobs in March, the most in four years, setting the stage for what some economists say will be sustained employment gains.Better weather, hiring of temporary government workers and a growing economy may bring the biggest job increases since March 2006, said David Greenlaw, chief fixed-income economist at Morgan Stanley in New York. The rise would be the second since President Barack Obama took office in January 2009.
February payrolls dropped by 36,000, the Labor Department reported last week, depressed in part by East Coast snowstorms that closed many businesses. Excluding the effects of the weather and the hiring of government workers to conduct the 2010 Census, payrolls would have climbed by about 100,000, Greenlaw said today in a Bloomberg Radio interview.
“If you get a plus 100,000 number again in March, then you’d be talking about a headline reading of a little bit better than 300,000 when you factor in the weather bounce-back and the census effect,” he said.
Mish Comment: Hello Greenlaw - Is the headline all this is important? Does the fact that all of these jobs will vanish by June mean anything?
The February drop in payrolls was smaller than the 68,000 median decline forecast by economists surveyed by Bloomberg News before the March 5 report. The jobless rate, which hasn’t increased since October, held at 9.7 percent, even as more people entered the workforce.
Mish Comment: Go figure. Bernanke trumped up the affect of snow and economists upped their job loss estimates to ridiculous levels, some over 200,000. I called this in advance, as the above links show.
“We expect a sharp snapback in March payrolls as well,” said Dean Maki, chief U.S. economist at Barclays Capital Inc. in New York, the most accurate forecaster in a Bloomberg News survey in December. He didn’t give a specific estimate.Jan Hatzius, chief U.S. economist at Goldman Sachs Group Inc. in New York, said in a March 6 e-mail to customers that he anticipates payrolls this month will climb by about 275,000. About 50,000 of that represents the “underlying trend” in employment, he said, with about 100,000 attributable to the weather and another 125,000 to the census.
Mish Comment: Even after analysis shows that snow had no effect, economists are attributing 100,000 jobs to snow.
Joseph LaVorgna is more upbeat about the employment outlook, anticipating payroll gains averaging about 300,000 for the next three to four months.“We have overcut inventories, we have overcut capital spending and we have overcut jobs,” said LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York. A March payroll gain of as much as 450,000 “can’t be ruled out,” he said, and further increases are “going to convince people of the sustainability and durability of the recovery.”
“We could easily see” 300,000 jobs added this month, Brian Wesbury, chief economist at First Trust Portfolios in Wheaton, Illinois, said today in a Bloomberg Radio interview. “I don’t expect to see consistent gains of that size, but clearly March could be that number.”
I’ll Take The Under
“We have overcut inventories, we have overcut capital spending and we have overcut jobs,” said LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York. A March payroll gain of as much as 450,000 “can’t be ruled out,” he said, and further increases are “going to convince people of the sustainability and durability of the recovery.”
Even if by some miracle we see 450,000 jobs in March, they will all vanish by June. Not one of those quoted in the article above mentioned either of these points
1. These jobs are part-time
2. They will be gone by June or July
Economist clowns were wrong about snow last month, and now they are massively wrong in the other direction, confusing part time, temporary hiring with a sustainable recovery.
Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
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Property investors in the US may be interested in news that house prices in the country experienced a five per cent rise in value during February, compared with last year.
According to the latest data from the Clear Capital Home Data Index, the property market managed to withstand the introduction of an increasing number of foreclosed properties entering the market.
Alex Villacorta, senior statistician at Clear Capital, commented on the findings, saying that there had been an increase in the number of distressed properties becoming available.
"If the increase in demand that preceded the end of the last tax credit is any indication, home prices may dip only slightly into negative territory before getting an added boost before the April tax credit deadline," he explained.
Meanwhile, some of the regions that witnessed the greatest growth in value were Providence and Rhode Island, where prices increased by 6.1 per cent.
A recent report by Barclays Capital predicted that the US property market would begin to stabilise soon.
Istanbul continues to lead when it comes to property developments, a new report has claimed.
According to Turkish news source Hurriyet Daily News, for the second year in a row a joint study by PricewaterHouseCoopers and the Urban Land Institute (ULI) has found Turkey’s largest city to lead the way in terms of development expectations for the coming year.
Furthermore, the city ranked in the top five for real estate purchase expectations.
The news provider quoted Firuz Soyuer, board member at ULI Turkey, as saying that Istanbul stood as one of the top areas for development.
"We will probably see bigger portfolios. Investors might also look toward different areas to spread risk. Maybe shopping streets will come to the fore again," he predicted.
"International investors are still wary toward investing in logistics. Meanwhile, hotels in Istanbul still do not number many. Thus, we will see an increase in the supply of four-star hotels on the Anatolian side especially."
Property investors looking to the country may wish to consider property in Bodrum, as three low-cost airlines have all announced plans to increase the number of flights to the region.
An increasing number of property investors are returning to traditional and established destinations in light of the current economic climate.
A new survey conducted by HomeAway.co.uk has revealed that this coming year the property market is likely to be dominated by "cash-rich, lifestyle buyers" looking to capitalise on lower prices in popular destinations.
Among the countries likely to benefit from this influx of investors is Spain, where huge discounts and reduced prices are giving canny buyers the opportunity to pick up a bargain.
Charles Weston-Baker, head of Savills International, said: "In 2010, the overseas second home market will be characterised by cash-rich, lifestyle buyers benefiting from lower prices in traditional, established holiday home hotspots."
Meanwhile, the HomeAway survey also found that the attraction of overseas property is still present for many individuals, with a fifth of those questioned claiming that they planned to make additional purchases in the future.
The National Association of Estate Agents International recently suggested individuals looking to buy property in Spain should do so in the early part of 2010.
This timeline looks at the history of U.S.-Russia arms control milestones from 1949 to present.
In my post San Francisco Infested with Union Parasites and Pestilence; Outrage Over Transit Worker Pay I noted how greedy public unions finally overplayed their hand by rejecting an 8% pay raise with a contract that guarantees they get the second highest pay in the nation.
In a followup story, Supervisor Sean Elsbernd is now going ahead with his initiative to address Muni pay, because the city council wimps did not have the courage or the decency to take on the unions. Please consider Proposed initiative aims at Muni drivers’ pay
A San Francisco supervisor is following through on his plan to curb Muni’s labor costs and on Monday submitted a proposed initiative for the November ballot.The plan takes direct aim at a controversial salary formula enshrined in the city charter that for more than four decades has guaranteed Muni drivers their spot as the second highest-paid transit operators in the nation.
It also would eliminate a trust fund for Muni operators that has resulted in yearly payouts of up to $3,000 for full-time operators. The fund originally was established to help defray health care costs for dependents, but operators can use that money any way they choose.
Elsbernd turned his proposal over to the city attorney for official review Monday and hopes to start collecting signatures by month’s end to qualify it for the fall ballot.
He has until July 6 to collect the valid signatures of nearly 47,000 voters registered in the city.
Elsbernd has the backing of the San Francisco Chamber of Commerce and the San Francisco Planning and Urban Research Association, a civic think tank, but many at City Hall and in the transit-advocacy community are taking a much more cautious approach.
If enough valid signatures are gathered, the proposed amendment would be on the Nov. 2 ballot.
What Took So Long?
That’s all it takes? So, what took so long? If voters approve this, expect to see more such initiatives.
Irwin Lum, president of Transport Workers Union Local 250-A, responded by saying “To just focus on operators isn’t right and isn’t fair.”
Yes, indeed, San Francisco needs to do something about all union termites and parasites, not just the union termites and parasites at Muni. Moreover, it is sad to gather all those signatures only to do a wimpy job on an initiative that does not go far enough.
“What this will do is divide people instead of dealing with the bigger issue of funding” said, Irwin Lum.
No. What will do is unite voters against city hall and unions. When this passes, and I expect this to easily pass because the proposal is so modest, citizens will be even more encouraged by such measures. It’s the perfect out for council wimps who do not have to challenge unions directly yet, it offers what seems to be a relatively easy process for citizens to take matters into their own hands.
Although Elsbernd did not go far enough (perhaps on purpose to make sure this passes), he must be commended for having the courage to start the city on the road to curbing union termites and pestilence.
Expect this initiative to pass, and emboldened citizens to follow up with more termite ridding measures.
Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
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Iraq’s security forces performed especially well during parliamentary elections but a big test looms in the months ahead as votes are counted and Iraqi factions try to form a government, says CFR’s Brett McGurk.
We’ve now come full circle. Instead of trying to get people to stay in their homes, Obama is willing to pay them to leave. Please consider Program Will Pay Homeowners to Sell at a Loss.
In an effort to end the foreclosure crisis, the Obama administration has been trying to keep defaulting owners in their homes. Now it will take a new approach: paying some of them to leave.This latest program, which will allow owners to sell for less than they owe and will give them a little cash to speed them on their way, is one of the administration’s most aggressive attempts to grapple with a problem that has defied solutions.
Under the new program, the servicing bank, as with all modifications, will get $1,000. Another $1,000 can go toward a second loan, if there is one. And for the first time the government would give money to the distressed homeowners themselves. They will get $1,500 in “relocation assistance.”
Short sales are “tailor-made for fraud,” said Mr. Lawler, a former executive at the mortgage finance company Fannie Mae.
Under the new federal program, a lender will use real estate agents to determine the value of a home and thus the minimum to accept. This figure will not be shared with the owner, but if an offer comes in that is equal to or higher than this amount, the lender must take it.
Big Shell Game
Diana Olick describes the situation perfectly in Mortgage Principal Writedown Won’t Save Housing.
And so it begins. Big gun lawmakers are making the move toward principal writedowns as the last resort to save the housing market.The problem is prices. Home prices have fallen so far in the hardest hit areas, the areas where the bulk of the troubled loans are, that banks would have to write down principal 30 to 50 percent to put borrowers back in the green. Accounting rules require that banks write down the value of those loans on their books, and experts tell me that if banks really accounted for all the losses in the home loan market, they’d all be insolvent.
That’s why the Obama Administration has created this kind of shell game in the first place.
I stole that shell game idea from housing consultant Howard Glaser: “We’re spending tens of billions of dollars on a tax credit to get people to purchase homes, we’re spending federal money to keep them in their homes through the modification program, and now we’re going to pay them to move out of their homes. This is not a sustainable system for the housing market. It’s a shell game. Bernie Madoff could have created this system,” Glaser told me today.
F.R.A.U.D.
Let’s take real estate agents who might not have had any sales for 6 months or even a year, and agents who have a vested interest (a commission) in selling a home, and let’s put them in charge of figuring out what a home is worth. Good idea.
Oh…there’s no chance real estate agents will sell homes to their friends for cheap or to total strangers for that matter, just to get a commission. Indeed, real estate agents have been the paragon of virtue throughout the crisis so this is the culmination of a perfect idea.
Even appraisers working directly for the bank might be tempted to make special arrangements with favored real estate agents. A final approval process at the bank would make fraud harder, but that is contrary the idea the lender must take an offer if it hits the established minimum bid. A secondary review would also slow things down.
That aside, even with the chance for fraud, lenders are losing money by doing nothing, and in many cases by letting people live in homes rent free for 18 months or longer. Perhaps dealing with fraud issues is the lesser of two evils, assuming of course the banks can afford the loan losses. Then again, what alternative is there besides pretending loans on the books are worth full value?
This is what our affordable housing program has become: Giving tax credits to new home buyers, spending taxpayer money to keep people in their homes, paying people to move out of their homes, and bankrolling Fannie Mae and Freddie Mac with tax dollars for unlimited losses.
Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
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In what can best be described as a contrarian indicator with an uncertain timing trigger, Mutual Fund Cash Depletion Highest Since 1991.
Equity mutual funds are burning through cash at the fastest rate in 18 years, leaving them with the smallest reserves since 2007 in a sign that gains for the Standard & Poor’s 500 Index may slow.Cash dropped to 3.6 percent of assets from 5.7 percent in January 2009, leaving managers with $172 billion in the quickest decrease since 1991, Investment Company Institute data show. The last time stock managers held such a small proportion was September 2007, a month before the S&P 500 began a 57 percent drop, according to data compiled by Bloomberg.
Stocks will rally this year as the prospect of higher interest rates lures cash from fixed-income securities to equity accounts, says Mark Bronzo at Security Global Investors. Data from ICI, the Washington-based lobbying group for professional money managers, show investors have pumped $369 billion into bond funds since March 2009 versus $23.4 billion for equities.
“There’s so much money in the fixed-income market and there’s so much money in money-market instruments paying almost nothing,” said Bronzo, whose firm oversees $21 billion, in an interview from Irvington, New York. “If that money shifts to stock funds, it’s going to be very bullish.”
Equities may be boosted by investors deploying some of the $3.17 trillion held in money-market funds tracked by ICI. While $754.3 billion has moved from the accounts in 14 months for the fastest decline on record, Bronzo says more cash will be withdrawn as investors gain confidence in the economy.
It gets tiring pointing this out, but the only time money can move into the equity market is at IPO time or other offerings. Otherwise it is impossible for sideline cash to move into equities. For every buyer there is a seller. At the end of any normal equity transaction, there is as much cash on the sidelines as before.
So many misunderstand the simple mathematical function of buying and selling, that I feel obliged to make corrections.
Sentiment, Not Sideline Cash, Is The Driving Force
Share prices do not move up because sideline cash comes in (as noted above it cannot happen in the first place). Share prices rise or fall because buyers or sellers are more aggressive in what they are willing to do. In other words shares are repriced and sentiment is the driving force.
For those who want a second opinion, John Hussman has written about sideline cash on several occasions. Please consider There’s No Such Thing as Idle Cash on the Sidelines.
Moreover, it’s important not to confuse money with debt. Sideline cash is really sideline credit. There is actually very little real cash available relative to total debt and what is needed to service that debt.
Suggestions to “Buy the Dip” based on sideline cash not only shows a lack of understanding about how markets work, they also show a lack of understanding about how extreme sentiment is among fund managers.
Please note that Insider Selling Hits New 2010 High in March. So while mutual funds are loading up, insiders who likely know much more about business fundamentals are selling hand over fist.
Risk is not high, it is extreme. When it all matters is anyone’s guess.
Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List
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