Tags: Serfdom

Introducing Ghost Skyscrapers – NYC Real Estate Goes Full Retard

Screen Shot 2014-07-10 at 12.59.26 PMLate last month, New York Magazine published a lengthy and very important article titled: Stash Pad – Why New York Real Estate is the New Swiss Bank Account. The entire article is well worth a read, and left me shaking my head in disbelief the entire time. As someone who grew up in New York City, it’s a real shame to see the continued transformation of Manhattan into nothing more than an oligarch playground, or as I sometimes like to call it, “Disneyland for Wall Street.”

One of the most shocking and disturbing revelations from that article was the fact that:

“The Census Bureau estimates that 30 percent of all apartments in the quadrant from 49th to 70th Streets between Fifth and Park are vacant at least ten months a year.”

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Poverty in the UK Doubles Over the Past 30 Years, Despite Robust “Economic Growth”

One of my favorite lines about the current oligarch theft continuing to occur throughout the world is courtesy of the “Artist Taxi Driver,” who likes to state:

“This is not a recession its a robbery.”

Truer words were never said, but this theft goes back a lot further than the latest economic catastrophe. As we all know by now, real median wages haven’t increased in the U.S. for the past 45 years, while at the same time, so-called economic growth according to traditional metrics has exploded higher. As yesterday’s article from the Guardian below demonstrates, this is not just an American problem. It is pervasive throughout the Western world.

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Home Equity Loans Jump 8% as Broke American Serfs Scramble for Cash

Screen Shot 2014-05-30 at 3.15.18 PM With real incomes stagnant and the cost of everything from food, school tuition and healthcare premiums skyrocketing for millions of Americans, it appears that borrowing against one’s home is once again a key source for consumption, if not survival, for the nearly extinct socio-economic demographic known as the middle-class.

The Wall Street Journal reported yesterday that home-equity lines of credit (Helocs) had increased at a 8% rate year-over-year in 1Q14. Some banks are more aggressive than others, and perhaps we shouldn’t be surprised to see TBTF government welfare baby Bank of America leading the charge, with $1.98 billion in Helocs in the first quarter, up 77% versus 1Q13.

From the WSJ:

A rebound in house prices and near-record-low interest rates are prompting homeowners to borrow against their properties, marking the return of a practice that was all the rage before the financial crisis.

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With 1 in 3 Homes Unaffordable, Freddie Mac Prepares to Enter the Trailer Home Loan Market

I can’t say this is surprising. After all, with average peasants, I mean citizens, now priced out of the domestic housing market (Zillow recently showed 1 in 3 homes are unaffordable) due to billionaire financiers and foreign oligarchs buying up all real estate in cash purchases, American serfs now will find out where the “elites” think they belong. In trailer homes, naturally.

Oh, but the story gets better, a lot better. As is generally the case in the USSA these days, crony capitalist oligarchs have perfectly positioned themselves to benefit financially from the final transition of Americans to neo-feudalism. Recall that in my post from last October titled, Carlyle Group’s Latest Investment…Trailer Parks, it was noted that trailer park owners share the following attractive quality:

Our customers have no alternative shot at homeownership, nor do they [normally] even have the credit scores and quality to seek anything better…They never leave the park they are in, and the revenues are unbelievably stable as a result.

Sure, we know from the Dark Ages that peasants on the land stay put. Same concept here. However, it gets even better than this. America’s number one hypocritical, crony capitalist, Warren Buffett is also positioned to benefit.

From Bloomberg:

Want to buy a trailer park? Freddie Mac wants to give you a loan.

The unit of the government-owned mortgage giant that funds apartment buildings is set to begin financing manufactured-housing communities, the company said in a statement today.

The firm is broadening its reach in the multifamily segment of the housing market as it seeks to fulfill its mandate to provide affordable options for low-income families. The McLean, Virginia-based lender will work with established companies in the industry across the U.S., said David Brickman, the head of multifamily operations at Freddie Mac.

“It’s rounding out our ability to touch the affordable housing space,” Brickman said today in a telephone interview. “Manufactured housing is a big piece of rural affordable housing.”

Warren Buffett, the billionaire chairman of Berkshire Hathaway Inc., lamented the punitive rates charged to purchase factory-built homes in his 2009 annual letter to shareholders. Berkshire owns Clayton Homes Inc., a builder of manufactured housing.

Screen Shot 2014-04-30 at 2.17.55 PM

Serfs up!

Full article here.

In Liberty,
Michael Krieger

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Charleston Man Receives $525 Federal Fine for Failing to Pay for a $0.89 Refill

Some of you may wonder why of all the stories out there today I decided to focus on the $525 fine a construction worker in South Carolina received a for refilling his drink without paying. The reason is to highlight the difference between what happens when a peasant breaks the law versus when a banker does it.

In this case, citizen Christopher Lewis refilled his drink without paying at the VA Medical Center in downtown Charleston. For this horrific offense (a refill costs $0.89), he was hauled into a room by the Federal Police Force and given a ticket for $525. Even worse, he was told not to ever come back to the premises, so he ended up losing his job as well.

So for this undoubtably minor offense, Mr. Lewis received a fine almost 600x greater than the cost of the crime and lost his ability to support himself. Compare that to the slap on the wrist banks receive when they are caught engaging in criminal behavior that leads to the theft of billions of dollars. At the worst, they pay a fine that is only a fraction of the profits and no one goes to jail, so the law actually incentivizes major financial crime. Meanwhile, if a peasant steps out of line, even for the most minor offense, the full brute force of federal law comes down like a ton of bricks. This is one of the main reasons why the social fabric of society is being torn apart, and unfortunately, there will be a hefty price to pay for it in the future.

This is a theme I have written about time and time again, most recently in a two part series, which I suggest reading:

Some Money Launderers are “More Equal” than Others

Some Money Launderers are More Equal than Others Part 2 – CEO of BitInstant is Arrested

From WCSC News we learn that:

CHARLESTON COUNTY, SC (WCSC) - A North Charleston man was hit with a federal fine for refilling his drink without paying. The on-site construction worker says he didn’t know refills at the VA Medical Center in downtown Charleston came at a price, and Wednesday, during his lunch hour, he was slapped with federal charges.

The ticket was issued by the Federal Police Force at the VA Medical Center in downtown Charleston after Christopher Lewis refilled his soda without paying the $0.89. A hospital spokesperson called it a “theft of government property.”

“Every time I look at the ticket, it’s unbelievable to me,” says Lewis, who works construction. “I can’t fathom the fact that I made a $0.89 mistake that cost me $525.”

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The Debt Bubble Expands as Auto Loan Amounts Hit a New Record

Is anyone surprised that the poorest and least credit worthy of Americans are being saddled with piles of debt in order to buy new cars? It’s not enough that a generation of our citizens will toil pointlessly to pay off more than $1 trillion of student loans, we may as well add some other form of debt burden on top of it.

It’s hard to even imagine this is happening so shortly after the last credit bubble train wreck, but happening it is. Creative ways for people to purchase cars they can’t afford have been on my radar screen for some time now, and if you recall, I posted an article last April titled: Just Keep Dancing: Introducing the 97-Month Auto Loan.

Well the dancing has continued, and now we have Americans borrowing at all-time record levels to buy cars. USA! USA!

From CNBC:

A combination of higher prices for new cars and relatively low rates for auto loans means Americans are borrowing a record amount to pay for their new rides.

According to Experian Automotive, which tracks millions of auto loans written each quarter, the average amount borrowed by car buyers last quarter climbed above $27,000 for the first time ever.

According to Experian, the average auto loan in fourth quarter 2013 was $27,430—an increase of $739 compared with the same period of 2012. The average used car loan was $345 higher, coming in at $17,974.

Those with non-prime credit ratings—or credit scores between 620 and 679—had the highest average auto loan. For these borrowers, the average new car loan rose more than $1,500, to a new high of $29,385.

Not surprisingly, those with subprime credit ratings—credit scores between 550 and 619—had the highest average monthly payment, of $499.

Yep, no doubt this will turn out just peachy.

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How Debtors’ Prisons are Making a Comeback in America

Apparently having 5% of the world’s population, but 25% of its prisoners simply isn’t good enough for neo-feudal America. No, we need to find more creative and archaic ways to wastefully, immorally and seemingly unconstitutionally incarcerate poor people. Welcome to the latest trend in the penal colony formerly known as America. Debtors’ prisons. A practice I thought had long since been deemed outdated (indeed it has been largely eradicated in the Western world with the exception of about 1/3 of U.S. states as well as Greece).

From Fox News:

As if out of a Charles Dickens novel, people struggling to pay overdue fines and fees associated with court costs for even the simplest traffic infractions are being thrown in jail across the United States.

Critics are calling the practice the new “debtors’ prison” — referring to the jails that flourished in the U.S. and Western Europe over 150 years ago. Before the time of bankruptcy laws and social safety nets, poor folks and ruined business owners were locked up until their debts were paid off.

Reforms eventually outlawed the practice. But groups like the Brennan Center for Justice and the American Civil Liberties Union say it’s been reborn in local courts which may not be aware it’s against the law to send indigent people to jail over unpaid fines and fees — or they just haven’t been called on it until now.

The Brennan Center for Justice at New York University’s School of Law released a “Tool Kit for Action” in 2012 that broke down the cost to municipalities to jail debtors in comparison with the amount of old debt it was collecting. It doesn’t look like a bargain. For example, according to the report, Mecklenburg County, N.C., collected $33,476 in debts in 2009, but spent $40,000 jailing 246 debtors — a loss of $6,524.

Don’t worry, I’m sure private prisons for debtors will soon spring up to make this practice a pillar of GDP growth.

Many jurisdictions have taken to hiring private collection/probation companies to go after debtors, giving them the authority to revoke probation and incarcerate if they can’t pay. Research into the practice has found that private companies impose their own additional surcharges. Some 15 private companies have emerged to run these services in the South, including the popular Judicial Correction Services (JCS).

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McDonalds’ Latest Advice to its Peasant Employees: “Quit Complaining” and “Sing a Song”

Back in July, I highlighted a ridiculous and insulting campaign that McDonalds ran with Visa in which the company tried to help its impoverished employees plan a budget. The only thing the campaign did was embarrass the company by proving that you can’t survive working there.

Well the company is right back at it in time for the holidays, with several pieces of advice for its legions of serf employees through its “McResource” website. Three of the more insulting pieces of wisdom include:

“Sing away stress: Singing along to your favorite songs can lower your blood pressure.”

“Break it up: Breaking food into pieces often results in eating less and still feeling full.”

I saved the best for last…

“Quit complaining: Stress hormone levels rise by 15% after ten minutes of complaining.”

Are you “lovin’ it” yet? Video below:

 

Colorado Rejects State Tax Increase Supported by Former NYC Mayor Michael Bloomberg

One of the measures on the ballot in the state of Colorado on Tuesday was Amendment 66, which would have raised the state income tax in order to provide more funds for public education. I voted against it for two main reasons.

First, it seems any time politicians want to take money out of your pocket they now scream “public education” as if like some pavlovian dogs we will all immediately say yes. It has become increasingly clear to me, as well as many other Americans, that a lack of money is clearly not the problem. Not in public education and not in a lot of things. Certainly it wasn’t hard to come up with trillions out of thin air when the bankers needed it. So give me a fucking break.

Second, the measure would have taxed certain communities disproportionately to others. This is precisely the problem with centralization. When one community gets taxed to provide for another there will almost always be zero accountability.

The measure failed by a wide majority, and what makes it failure even sweeter is the fact that nanny-state former NYC mayor Michael Bloomberg was a strong supporter. This is the second time this year (that I know of) where Bloomberg tried to influence local Colorado politics and the second time his efforts have failed. The first instance was his support for pro-gun control candidates that faced a recall election.

As I said at the time, I hope the oligarch wastes all his billions on his pet causes no one cares about.

More from the WSJ:

A ballot measure to raise income taxes to fund education in Colorado failed by a wide margin Tuesday, two years after state voters rejected a similar plan to increase taxes for schools.

Roughly 66% of voters had rejected the tax proposal, with 85% of Colorado precincts reporting, according to the Associated Press. The measure, known as Amendment 66, would have raised close to $1 billion a year for schools and overhauled the way the state assigns money to school districts.

The measure had attracted national attention from political observers who saw it as a test of whether tax increases tied to education reform had a better chance of passing.

“Coloradans recognize that now is not the time to raise taxes,” said Kelly Maher, a member of Coloradans for Real Education Reform, a group that opposed the new tax. “We need real education reform before Coloradans are going to reach into their pocketbook and give any more money.”

Supporters said the tax, backed by a coalition that included teachers unions and charter-school proponents as well as New York Mayor Michael Bloomberg and philanthropist Melinda Gates, was necessary to ensure that all Colorado children get a quality education. The funds would be used to improve art and sports programs, as well as provide more support to poor students. Money would also be used to extend classroom time for preschoolers and kindergartners.

You’ve done enough damage to my hometown of NYC, we don’t need your meddling here Bloomie.

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The Carlyle Group’s Latest Investment…Trailer Parks

Earlier this month, I highlighted the fact that the Carlyle Group was the latest in a series of “smart money” private equity firms to decide it was time to exit the suddenly extremely crowded “buy-to rent” residential real estate trade. At the time I noted that:

As it sells apartments, Carlyle is focusing investments in areas such as senior housing, self-storage units and manufactured homes, where demand tends to be driven by life changes such as retirement or marriages, and isn’t so closely tied to changes in employment and gross domestic product, Stuckey said.

Well it appears Carlyle has already started to make its move. As the Wall Street Journal reported on Tuesday: Carlyle Jumps Into Niche Space - Private-Equity Firm Adds Trailer Parks to Its Diverse Portfolio. In case you can’t figure out what appears to be the key logic behind the shift in focus, try this line on for size: 

Because the cost of relocating a home is expensive, residents are less likely to move away. “Our customers have no alternative shot at homeownership, nor do they [normally] even have the credit scores and quality to seek anything better,” Mr. Rolfe said. “They never leave the park they are in, and the revenues are unbelievably stable as a result.”

In neo-feudalistic America, always, always go long serfdom.

More from the WSJ:

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