Wednesday, September 30, 2015

The Simple Solution to High Rent in the Bay Area

The Legendary Thomas Sowell talks about CA's stratospheric home prices.

When more than half the land in San Mateo County is legally off-limits to building, how surprised should we be that housing prices in the city of San Mateo are now so high that politically appointed task forces have to be formed to solve the “complex” question of how things got to be the way they are and what to do about it? 
However simple the answer, it will not be easy to go against the organized, self-righteous activists for whom “open space” is a sacred cause, automatically overriding the interests of everybody else.

Was it just a coincidence that some other parts of the country saw skyrocketing housing prices when similar severe restrictions on building went into effect? Or that similar policies in other countries have had the same effect? How “complex” is that?

Sunday, September 27, 2015

CA Pensions run by idiots: Giant U.S. Pension Fund Calstrs to Propose Shift Away From Stocks, Bonds

And CAians are PAYING for this service?

I find this beyond believable.  With the BILLIONS of dollars in pension money, they could hire anyone they wanted to assist them in making correct choices as to where and what to invest pensioners' money.

But instead,whoever they have hired is doing an abysmally bad job of advising/controlling pension money.  Now they are talking about moving money out of stocks.  Now after markets have lost billions of dollars now they want to talk about moving money out of the stock markets?  Now they want to talk about hedging for a down market?

Free is better

Why am I saying this?  Because information available for FREE had warned what was coming.  And I'm not talking about perma-bears.  I'm talking about financial advisers that are normally very optimistic.

First, let's look at a graph of the Dow Jones Industrial Average.  The market top was about May 19, 2015.  the brown arrows highlight the areas where the decline massively accelerated: August 18th through August 26th:

Case 1:  Lance Roberts

Lance Roberts of was one of who saw what was happening.  Lance handles a small amount of my money (which means he handles a small amount of the small amount of money I have put aside for retirement). He puts out a weekly newsletter.  It is very interesting to see into his mind and analysis from the high and until he said to pretty much sell everything.  Very methodical, emotionless on.

Let's see how things progressed in his newsletters starting with the week that includes May 19:

May 23:
"From the broader macro-technical perspective, the current bullish trend remains very much intact despite deterioration in market liquidity, equity outflows and weak fundamentals."

May 31:
"Yes, the markets hit new highs this year - but it has been a volatile struggle to get there. While the markets have ground their way higher, the back and forth price action has sent a variety of internal momentum and breadth indicators into retreat suggesting a much less 'healthy' market than headline numbers would suggest. (It is not coincidental that the same holds true for the broader macroeconomic environment.)"

June 6:
"As I discussed earlier this week, EVERY single long-term market indicator has now broken down and send signals that have ONLY occurred at prior major market peaks. ... The market has been sending repeated warnings as of late which suggests that investors remain on HIGH ALERT. With portfolio's fully allocated currently, the risk to principal of a sharp downward contraction is elevated.

If the market does begin a breakdown I will issue a full alert with instructions on how to react. However, in the meantime, it remains advisable to continue rebalancing portfolios. I have reiterated those instructions in the 401k Plan Manager again this week. "

June 13:
 "With the longer-term bullish trend still intact, there is little reason to become overly defensive in the allocation model currently.

However, all of the indicators are suggesting that investors should be AWARE of the mounting risks. Therefore, investors SHOULD rebalance portfolios as instructed in the 401k Plan Manager over the last several weeks which will slightly increase cash holdings.

These 'warning' signals suggest the risk of a market correction is on the rise. However, all price trends remain within the confines of a bullish advance. Therefore, portfolios should remain tilted toward equity exposure 'currently.'  "

June 20:
"The bottom line is that the current technical deterioration of the market should not be ignored. There are a few pockets of strength supporting the markets in some of the most speculative areas like biotechnology. I am warning you now; this will end very badly. I can't tell you WHEN, but I can tell you it WILL."

June 27:
"We are very close to a long-term macro sell signal and with the market failing at overhead resistance this only leaves the longer-term bullish trend line as support. I have noted in the chart above the potential declines that could occur with a break of that support."

July 3:
"China is likely more of a threat to the financial markets than Greece because what is happening in China, and as being witnessed by the Shanghai index, is NOT being covered by the media. As I have stated previously, what trips up the market is generally not an event that the market is well aware of, but one that catches it by surprise.

"Over the last several months every primary indicator of internal market strength has deteriorated. From relative strength to price action to momentum, the market is showing signs of exhaustion that have only previously been witnessed at more important cyclical market peaks.

"With relative strength deteriorating, momentum and moving averages all on the decline, the risk of lower market prices has risen markedly as of late.

HOWEVER, while the internals are VERY weak, the bullish trend has not been violated as of yet. This keeps portfolios weighted towards equities momentarily as liquidity flows into the market are still support asset prices. It is important to note that despite the internal deterioration currently, the markets still rest near all-time highs."

July 11:
"For the last several months, the markets have defied the deterioration in the internals. Weakening internals from momentum to breadth have all suggested that markets were becoming much more dangerous in the short term.

It was from that stand point that I begin reiterating every week that investors should be taking some actions in portfolios. As per the April 24th Newsletter."

July 25:
"While I was gone last week, the markets bounced sharply providing a good opportunity to rebalance portfolios as I have been suggesting.

There is increasing levels of risk and deterioration in the market currently and actions need to be taken to reduce relative portfolio risk and raise some CASH as a hedge against a potential further decline. 

IF the markets resume their bullish trend we can always VERY EASILY reinvest harvested cash back into the markets. It is a MUCH HARDER process to make up losses when we have failed to be proactive. Remember - the one commodity we can NEVER regain is TIME. 
Continue to review your current portfolio holdings and make adjustments as needed. Any slightly overweight holdings in cash from recent profit taking and rebalance instructions will simply act as a short-term hedge against market volatility." 

August 1:
"However, the problem is that currently there is 'no way' to tell which way it will break. A break to the upside would likely carry the markets toward 2250-2300. A break to the downside would most likely push prices towards the October 2014 lows of 1840-1850."

August 9:
"Continue to review your current portfolio holdings and make adjustments as needed. Any slightly overweight holdings in cash from recent profit taking and rebalance instructions will simply act as a short-term hedge against market volatility. "

August 23:
"The time has now come to start moving more heavily to cash. As I will discuss throughout this weekend's missive, including the 401k-Plan Manager, it is now time to 'OPPORTUNISTICALLY' REDUCE PORTFOLIO ALLOCATIONS."
So, you can see, Lance Roberts has along the way and well before the crash has told investors and clients to start selectively sell losers and on rallies, to sell into strength.  His August 23rd newsletter is sort of after the fact and isn't a whole lot of help by then, he did cover this on his radio program and recommended people sell have less than 24% of their portfolio in equities.  But, by then you would have already sold a lot of your losers, going into the market sell off in a position of strength.

And remember, all this information is FREE.

New let's look at Ken Moraif of  Again, he has a free newsletter and also has a radio program.  He issues "flash alerts" or emails when he is interviewed.

Case 2:  Ken Moraif

Ken Moraif Aug 9:
Many of you have been emailing me with your concerns that the bull market may be coming to an end. There is no doubt that this bull market will come to an end one day. I do not believe that the time is now. Therefore, it is not yet a time to sell.

That said, this does not mean it is not a time to be concerned. It is a time to begin the preparation for the inevitable. If your financial plan does not include a sell strategy, I believe that you are certainly at risk of losses like you may have seen back in 2000 and in 2008.
Ken Moraif Aug 20:
With the markets down over 2% today we now face the very real possibility that this could be the beginning of the bear market and that a global recession is coming.

There was no major reason why the market tumbled the way it did. It is the cumulative effect of little things that are making people start to realize what I have been warning you about for several months now and that is that the world has a massive debt problem and there is not the economic growth to provide the revenue to service it.
Ken Moraif Aug 21 - the next day:
Well, I actually didn't think it was possible to reach our sell trigger today but we did.

Therefore, it is now time to sell.

The radio show was recorded Friday morning and therefore I said that we had not reached our sell trigger yet. This is the advantage that you have by getting this email rather than someone who just wants to listen to the radio show to know what to do. Listeners of the radio show will not find out until a week later that we have sold.

Our strategy is not perfect and those of you that have been following me for a long time know that our strategy predicts bear markets but it also predicts bear markets that don’t happen. It is certainly possible that the market will bounce back from here and that this is not the beginning of a bear market. However, now that we have hit our trigger point the odds are very high that this is the bear market that we have been expecting. It seems that it came sooner than I thought.
There you have it.  Advice for FREE.

I'm sorry but I can't help but question the competency of the people running the CA pensions.

Saturday, September 26, 2015

German cars pollute...and no one noticed

This reminds me of the fracking "scare" when CA finally noticed that fracking had been occuring in their own back yard for decades.

Up to that point no one noticed.

There was no environmental impact.  No "poisonous" chemicals leached into the aquifer.  No one was killed. No one got cancer because of this.

The "scandal" affects 482,000 VW diesel cars in the USA. The total number of cars on the streets amounts to 253 million.  This minuscule 0.19% will have ZERO IMPACT on the environment.

In fact, studies have shown that 90% of the pollution is caused by only 25% of the cars on the road, so the VW diesels would have an outsized effect on pollution.

So, in the grand scheme of things, what is the real impact?  For the VW diesels, the only impact anyone seems to be upset about is NOx.  And here, the greatest absolute impact would be in large cities - there are more cars, thus more diesel VWs.  But, of course, large cities are where the vast number of cars are located.  So, the per centage impact on the local environment is again almost zero.

So, what we see is that the federal government is upset that it was LIED TO.  And that's really the only story here.  All that other stuff about massive amounts of pollutants belching out of VW diesels choking the elderly and children to death are just that themselves.

But do I care that VW lied?  NO!!! They came out with a car that met my number one criteria:  maximum mileage and no stupid banks of batteries to haul around.

According to the article, the alternative to the VW "Clean Diesel" design is to add a chemical injection system to obliterate NOx.  This is a horrible solution.  Not only is it expensive at $5,000 - $8,000 the owner will NEVER remember to get it checked.

But here again, so what?  The vehicles apparently sensed when they were being analyzed and went "shields up".  And....the cars passed the emissions testing with flying colors.  If this is the case, then NOTHING needs to be done other than reprogram the car's system.  This all really sounds simple.

I say to hell with the EPA.

Friday, September 25, 2015

White House sends cap-and-trade warning to states

The EPA can go fuck itself.
Under the Clean Power Plan, states are on the hook to develop federally enforceable compliance plans detailing how they will reduce a third of their emissions by 2030. States have the option of complying in any number of ways under the plan, including participation in a cap-and-trade program. If a state refuses to comply, however, the EPA would step in to impose a federal plan without much input from the state, and leaving it open to having a cap-and-trade program forced upon it.

A cap-and-trade program places a firm limit, or cap, on emissions and then sells credits to emitters to help them comply. Democrats failed to pass cap-and-trade legislation in President Obama's first term, and the Clean Power Plan is seen as the alternative.
94,000,000 people are out of work.  Record numbers are on food stamps.  So the answer to all of this? That's easy.  Let's DOUBLE DOWN ON JOB KILLING REGULATIONS.

I just can't believe that the people who work for the EPA actually think they are doing a good thing.

Wednesday, September 23, 2015

Munger warns state will have $12.8 billion in unpaid bills if no budget by New Year’s

I give Illinois three years. Tops.
If nothing changes, Illinois will enter calendar year 2016 with about $8.5 billion in unpaid bills, the state comptroller said Wednesday.

And that’s not the whole of it.

The $8.5 billion figure only accounts for what the state is now spending to cover costs Illinois must pay to stay right with consent decrees, court orders and current law, Comptroller Leslie Geissler Munger said.

Payments for costs being incurred but not now being made because of the lack of a budget — for instance, higher education and commercial spending — would add another $4.3 billion per year, she said.

Record Homelessness in Los Angeles -- But Nobody Blames the Democrats

Just like in Detroit.  No one blames the Democrats!  It's like everyone shakes their heads saying "well, it's just one of those things!"

How does this happen? You've got a perfectly run city by liberals, you've got a liberal Hollywood, you've got liberalism running that town and all the supposed benefits of it -- compassion and caring and concern and anti-discrimination, whatever it is that comes under that umbrella -- how in the hell can you have a record number of homeless? See, I only thought homelessness happened with Republican presidents, and furthermore, I thought it only got reported with Republican presidents. What's the LA Times even doing reporting this? I know, I know, it's a rhetorical question. It's so bad, they can't ignore it.

It is bad. It's causing the closure of emergency rooms along with illegal immigration. The hospitals can't stay in business. You know, federal law, you gotta be treated when you show up in the emergency room. You know how many hospitals have closed in southern California alone in the last number of years because of illegal immigrants and nonpayers visiting the emergency room? They can't afford it anymore.

Liberalism can't be afforded, period, but it doesn't mean they don't give up trying, but how can this situation even exist? How can there be a record number of homeless? Why is a hundred million dollars needed when you've got people that believe in utopia running the place? And why are they doing this now? Seriously. Why now? Why all of a sudden do they profess this massive concern about the homeless?

Thursday, September 17, 2015

Feds approve Texas high-speed rail corridor

Hot dog!  Now, let's build that rail!
In a 16-page report, the administration gave its blessing to the so-called "utility corridor," which follows high-voltage power lines for 70 percent of its length. That will give the rail line easy access to electrical power and reduce issues of right-of-way.

It's another big step for Dallas-based Texas Central Partners, which last month announced raising the first $75 million of the $10 billion project from private investors. Now that the 240-mile corridor is selected, the company will be able to host meetings with communities along the line as it seeks to finalize a route.

A high-speed rail from L.A. to Las Vegas? China says it's partnering with U.S. to build

I know why China is doing this.  It's for the same reason Japan is doing this in Texas.

Chinese officials now describe the project as a 230-mile route with an additional stop in Palmdale and eventual service throughout the Los Angeles area using some of the same track that would be used by the publicly backed California high-speed rail project.

Federal railroad records indicate that XpressWest has already secured approvals and permits from a number of federal agencies for the 185-mile route. Additional permits, approvals and environmental analysis would be needed for the 230-mile proposal.

“As China's first high-speed railway project in the United States, the project will be a landmark in overseas investment for the Chinese railway sector and serve as a model of international cooperation,” Yang Zhongmin, chairman of China Railway International, told the state-run Xinhua News Agency.
Let's hope it works out!

Monday, September 14, 2015

Fears grow over US stock market bubble

I've kept an eye on Il/Chicago.  CA may be bad, but Chicago is about to be put on life support.
The nation’s third-largest public school system is set to open Tuesday without enough money to make it through the school year, as layoffs, school closings and contract fights have failed to stem mounting fiscal problems.

Chicago Public Schools—with 394,000 students and nearly 21,000 teachers—has closed more than half of a projected $1.1 billion shortfall through cuts, borrowing and other means, but is looking to the state to come up with the rest. The school board warns of deep cuts later this year if Illinois, which faces its own fiscal crisis, doesn’t deliver an additional $480 million in the coming months, representing roughly 8% of annual district spending.

“It is like the board is a desperate gambler at the end of their run,” said Jesse Sharkey, vice president of the Chicago Teachers Union, in a recent speech.

Chicago’s deepening fiscal problems, driven by fast-growing pension costs and declining state aid, run largely counter to the brightening picture for districts across the country as they open their doors for a new school year. While budgets remain tight, school finances are improving as the strengthening U.S. economy helps boost local tax collections and state support for education.

Friday, September 11, 2015

Uh huh – New studies say global warming could trigger an ice age

Oh yes!  It's true!


Just another attempt by Climate Liars to have their cake and eat it, too.
According to two new studies, global warming could (supposedly) shut down ocean circulation. This could drop vast stretches of Asia into drought and expose the entire Northern Hemisphere to severe ice and snow.

“This change would be sudden and sharp enough to roil civilization—happening in as little as three years and resulting in as much as an 18-degree Fahrenheit drop in average temperatures,” says this article by Tony Dokoupil.

University of California considering recognizing a “right” to be “free from … expressions of intolerance”

CA colleges are doomed for disintegration.
Saying that illegal aliens (or noncitizens who are legally here) ought not be appointed to be, say, the student member of the Board of Regents — likewise condemned. And this isn’t limited to situations where the speaker is a participant in a selection decision, which the participants are obligated to make in a nondiscriminatory way. It equally applies to, say, a student newspaper that condemns the appointment of noncitizens to leadership positions. (For a recent controversy along these lines in a local city, which could equally arise at a university, see this story about two illegal aliens named as volunteers to city commissions in an L.A.-area town.)


Thursday, September 10, 2015

TV Ratings: Colbert and Fallon Tie in Night 2, 'Late Show' Sees a Demo Drop

Wow.  I am just amazed that people didn't see this coming.  After his embarrassing show trying to connect Trump to the KKK, you KNEW that people would start tuning out.  And isn't the Late Show filmed in New York City?

After a strong debut Tuesday, Stephen Colbert earned a less overwhelming win on Wednesday. Shedding 35 percent in the overnight metered market ratings, CBS' Late Show was virtually tied with NBC's Tonight.

Wednesday, September 9, 2015

Trillions, Not Billions Of Trees

I'm not surprised at all.
“Trees are among the most prominent and critical organisms on earth, yet we are only recently beginning to comprehend their global extent and distribution,” said Crowther. “They store huge amounts of carbon, are essential for the cycling of nutrients, for water and air quality, and for countless human service,” he added. “Yet you ask people to estimate, within an order of magnitude, how many trees there are and they don’t know where to begin. I don’t know what I would have guessed, but I was certainly surprised to find that we were talking about trillions.”
Later in the article the author mentions that we cut down 15 billion trees and only plant 5 billion replacements.  But, trees aren't cows.  We don't artificially inseminate trees to make more trees.  Tress are more than capable to reproduce themselves.  Just because a human isn't there to see a new tree grow doesn't mean it doesn't happen.  I dare say, many billions more grow from seedlings with no human help at all in planting.

‘McJobless in Seattle’ as order screens arrive: Labor Day reality check for $15 minimum wage

Now, who didn't see this coming?
McDonald’s has unveiled its plan to use touch-screen technology in self-service kiosks where customers can order and pay for their food.

According to a Business Insider report last month, McDonald’s franchisees see the minimum wage issue as “a major threat to the survival of the operator community,” and are encouraging the company to put “every resource available” into reducing labor costs through technologies such as kiosks and automatic fry dispensers.
Now, PLEASE vote the idiots out that voted for the pay raise.  But, heh, we know what will really happen.  The citizens will only double down and vote more Leftists into power.

Am I too cynical?

Monday, September 7, 2015

The Shadow Superpower

This is the future of America:

In many countries — particularly in the developing world — System D is growing faster than any other part of the economy, and it is an increasing force in world trade. But even in developed countries, after the financial crisis of 2008-09, System D was revealed to be an important financial coping mechanism. A 2009 study by Deutsche Bank, the huge German commercial lender, suggested that people in the European countries with the largest portions of their economies that were unlicensed and unregulated — in other words, citizens of the countries with the most robust System D — fared better in the economic meltdown of 2008 than folks living in centrally planned and tightly regulated nations. Studies of countries throughout Latin America have shown that desperate people turned to System D to survive during the most recent financial crisis.
Once the bottom has been hit, Americans will once again rediscover System D.

And America will be great again.

Saturday, September 5, 2015

Can California really cut gasoline use by 50 percent?

That's right.  Increase the cost of owning a vehicle and automatically lower the consumption of gasoline.

I haven't run the numbers, but more electric cars will put a significant load on the power grid in CA. And where is this extra electrical power going to come from?  It would be imported into the state. Well, that's already happening but will dramatically increase.

The cost for owning a car in CA is already extremely high.  An acquaintance of mine had to register his 1996 car in CA. He had to fork over $2,000.  For a 1996 model!  In Texas we only paid a nominal $70 regardless of the age of the car.

Here in MS, for my wife's 2015 Passat we would pay a whopping $700. I just can't imagine what we would have to pay in CA.  I don't dare imagine!

And who will ultimately have to suffer the outrageous burden of all of this?  THE POOR.

Again, as I've said before:  GET OUT OF CA.

Mayor Emanuel proposing record $500M property tax hike

Just amazing.  And just in time for another real estate crash, too.  In effect, the city will only succeed in getting a bigger share of the diminishing pie.

The total package could hit $500 million. The money would go mostly to pension payments.
So the questions I have are:
- Are there any concessions from unions to assist in controlling the out-of-control pension plans?
- How much longer are the people of Chicago going to take it?

Well, we know the answer to the last question.   All we have to do is look at Detroit.  The answer is that there is NO LIMIT to how much the people who are left in Detroit will take, because they are the LAST TO LEAVE a failing state.  It becomes part of their self-interest for the failed state to continue until absolutely everything implodes.  It's only then that those of sound mind and those less tainted with Leftist thinking can rebuild and establish a more stable government.

Applebee’s to move headquarters to California, lay off some area employees

Something of a switch.  Apparently, CA's way of fighting back.
Applebee’s moved its headquarters to Kansas City from Lenexa in 2011, aided in part by a $12.9 million incentive package from Kansas City and Missouri.

The tax incentives mostly came through the Missouri Quality Jobs program, but also involved a state job training program and the city’s Chapter 100 bond program. Applebee’s said at the time that it moved 388 employees to Kansas City.

It was unclear Monday whether shifting jobs to California would trigger any changes in the tax benefits DineEquity received at the time of the move.

DineEquity said moving the Applebee’s operations west would trigger $13 million in costs, consisting of $5 million in severance and labor costs and $8 million of lease and other facility costs. Mortesen could not elaborate.  
Is this what it's all about?  Maybe instead of trying to lure companies in a sort of cannibalistic frenzy, maybe a climate for start-up companies would be a better thing to do.  Otherwise, it is a fight over a diminishing, consumed pie.

The Socialist Pope

Well, if this is correct, Catholics must make a decision.  Follow the Pope down the Road To Ruin, or not.
SISTER SIMONE CAMPBELL: Pope Francis in the encyclical is extremely clear that the role of politics is to control the economy. And the only way we'll have an economy of inclusion is if politics provides an appropriate bound on the free market capitalism. He also says that all of creation has, what we believe in private ownership has a mortgage, a social mortgage to be used for the common good.

Now, that teaching is challenging for liberals and conservatives, because what it means is the focus of our work has got to be to address the issues of disparity, address this crisis of exploitation which is both a conservative and liberal issue. We've got to make change and make sure that all are included in the economy, but politics at the heart of it has got to be controlling the economy. That is a big change for our nation.
Later in the interview she softened the rhetoric saying centrally controlling the economy is not what the Pope means.  But Glass-Steagall is exactly that.