Liberty Blitzkrieg

Silicon Valley Billionaire Who Blocked Public Access to Popular Beach Claims: “He Owns the Road, the Beach and the Tides”

May 30, 2014May 29, 2014 by Michael Krieger

Earlier this month, I highlighted the fact that one of Obama’s closest billionaire buddies, Silicon Valley oligarch, Vinod Kholsa, had aggressively moved to block access to the very popular Northern California destination Martins Beach. The post was titled, Silicon Valley Billionaire Buys Popular Beach and Then Blocks Public Access, in which I wrote:

Vinod Kholsa, co-founder of Sun Microsystems and well known Silicon Valley venture capitalist, is at the center of a lawsuit revolving around the popular Northern California destination Martins Beach, located six miles south of Half Moon Bay. The beach has always been popular with families and surfers alike, and the prior owners had always provided access for a $5 fee. Mr. Kholsa has taken a different approach, which has consisted of putting up a locked gate to block the beach’s only road access point and painting over a billboard welcoming people to the beach.

At the time, some expressed disbelief that such a good so-called “liberal” would take this action, but it is now clear these people were in serious oligarch denial. We now learn from the SF Gate that:

There had, until now, been a note of uncertainty about why beach owner Vinod Khosla decided to kick people off Martins Beach, but the billionaire venture capitalist made his motives pretty clear, according to this Chronicle story by Melody Gutierrez.

The green tech titan does not want the hoi polloi touching what he believes is his sand, tidelands or surf.

“Martin’s beach is private property, including the sandy beach and the submerged tidelands seaward of the mean high tide,” argued lobbyists hired by Khosla in a letter to state lawmakers. “There are no existing ‘public’ lands to which access is needed.”

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Couple Fined $746 for the Crime of Feeding Homeless People in Florida Park

November 6, 2014May 29, 2014 by Michael Krieger

It is a well known historical trend that as discontent and dissent spread within a society, the power structure will look to demonize unpopular or weak minorities in order to deflect frustrations away from the true culprit, the power structure itself. Many feared in the immediate aftermath of 9/11 that Muslims would serve as such a scapegoat, and indeed in many ways this occurred, although not to the extent that many feared. In my opinion, it is homeless people that are being increasingly demonized and treated as subhuman. I think that if we want to see how the state and crony corporate status quo will treat everyone in the future, all you have to do is look at the current “war on the homeless.”

If you think about, the homeless actually serve as the perfect scapegoat for a former American middle class slowly being driven into serfdom. Still completely mesmerized by the religion of consumerism, how is a population losing its freedom and financial well-being supposed to feel better about itself. The easy answer is to look at an even more destitute class and treat them like the “elites” treat everyone else. Like a superfluous and unfortunate outgrowth of humanity.

I strongly believe that it is just as important to show compassion for the least fortunate within society as it is to fight against the incredibly corrupt establishment. Failing to do so makes you no better than they are.

From ThinkProgress:

After feeding the hungry in a Daytona Beach park every weekend for more than a year, it’s just as easy to imagine Chico and Debbie Jimenez given a ticker-tape parade as what they actually got: a slew of citations and a permanent ban from the park.Chico and Debbie Jimenez, a husband and wife team, aren’t handing out food in the Florida heat every Wednesday because of a court order or for a paycheck. They do it because they believe helping the poor is their religious duty.

Every Wednesday, the Jimenezes feed more than a hundred people a hearty lunch with dishes of chicken patties, macaroni salad, and fresh vegetables, among others. The meals are entirely funded by private donations and staffed with volunteers.

However, Daytona Beach is one of a handful of cities that enacted ordinances barring individuals from serving food in public. Last week, nearly a half-dozen police officers showed up at Manatee Island Park, where a long line of people had queued to get a meal, and served citations to the Jimenezes and volunteers.

According to the group’s Facebook page, Chico and Debbie, along with four volunteers, were each given multiple 2nd degree misdemeanor citations. The fines totaled $373 per person, $2,238 for the group. The police also permanently banned the group from Manatee Island Park. “We both have made a lot of good friends in the park and are devastated that we are banned the Manatee Park forever,” Debbie wrote. “I am heartbroken.”

Can’t arrest a single banker, but police sure are good at stopping citizens from feeding the hungry. Sick.

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Texas VA Run Like a “Crime Syndicate” Claims Whistleblower

May 28, 2014 by Michael Krieger

“For lack of a better term, you’ve got an organized crime syndicate,” a whistleblower who works in the Texas VA told The Daily Beast. “People up on top are suddenly afraid they may actually be prosecuted and they’re pressuring the little guys down below to cover it all up.”

What’s worse, the documents show the wrongdoing going unpunished for years, even after it was repeatedly reported to local and national VA authorities. That indicates a new troubling angle to the VA scandal: that the much touted investigations may be incapable of finding violations that are hiding in plain sight.

– From the excellent Daily Beast article published yesterday: Exclusive: Texas VA Run Like a ‘Crime Syndicate,’ Whistleblower Says

Unless you’ve been living under a rock for the past week or so, you are probably well aware of the latest in a consistent stream of scandals that have rocked the Obama Administration since he took office over five years ago. Yes, I am referring to the Veterans Affairs (VA) scandal, and while you might think you have read enough on the topic, the following article is very important.

It tells the tale of a VA hospital in Texas that had institutionalized the practice of manipulating hospital wait lists many years ago. For example, all the way back in 2011, the VA’s inspector general investigated the Central Texas health-care system in response to complaints received. Despite finding that such manipulation was rampant, not a single VA official was disciplined. As you might expect, the practice continued and the hospital highlighted in this article actually received an award in the face of an OIG investigation!

As such, this story has much wider implications than the obvious one. It demonstrates why corruption, fraud and white-collar crime is metastasizing throughout the land. The rich and powerful have recognized the rule of law has been completely suspended when it comes to them. They realize that no matter what they do, the worst thing that will happen is a slap on the wrist. So they continue to eagerly commit crimes at every conceivable opportunity. Of course, it’s the crimes of the rich and powerful that affect the largest number of people, not the impoverished youth slinging a dime bag on some ghetto corner. But which one is getting locked up?

As I have said time and time again, this suspension of the rule of law for the so-called “elites” is the most cancerous thing pervading American society at the moment. Dealing with this will go a long way to solving a lot of other problems.

From The Daily Beast:

Last week, President Obama pledged to address allegations of corruption and dangerous inefficiencies in the veterans’ health-care system. But before the president could deliver on his pledge, the scandal has spread even further. New whistleblower testimony and internal documents implicate an award-winning VA hospital in Texas in widespread wrongdoing—and what appears to be systemic fraud.

Emails and VA memos obtained exclusively by The Daily Beast provide what is among the most comprehensive accounts yet of how high-level VA hospital employees conspired to game the system. It shows not only how they manipulated hospital wait lists but why—to cover up the weeks and months veterans spent waiting for needed medical care. If those lag times had been revealed, it would have threatened the executives’ bonus pay.

The current VA scandal broke in Phoenix last month, when a former doctor at a VA hospital there became the first whistleblower to gain national attention. The doctor’s allegations of falsified appointments—and veterans dying while they waited for treatment—unleashed a wave of similar claims from VA employees nationwide. In Cheyenne, Wyoming, Chicago, and Albuquerque, more VA whistleblowers came forward claiming that the same fraudulent scheduling was being used in the hospitals where they worked. At last count, the VA inspector general’s investigation had expanded to 26 separate facilities.

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Commuters Herded Like Cattle as China Escalates its Own “War on Terror”

May 28, 2014 by Michael Krieger

I have often said that while 9/11 was a horrible event, our collective response to it has been the real tragedy (read my How I Remember September 11, 2001 post). A terrible event is no excuse to become such scared children that we would relinquish the basic freedoms our ancestors fought so hard to secure for us.

The only people who really benefit from an expansion of the surveillance state and a loss of liberties are the rich and powerful. With China’s economy in free fall and increased violence occurring, it appears the leadership there is taking a page out of our post 9/11 playbook. This is what the commute looks like at train stations in Beijing:

This is what cattle in pens look like:

Actually, the cattle have more space. Seriously though, this is all security theatre. As I have mentioned on prior occasions, I have never gone through one of those naked body scanners. Instead, I opt out for the TSA “freedom grope.” Why? Because I know it’s total bullshit and I’m not going along with it.

I fly from Denver to New York City quite a bit and you know what I’ve noticed. While every machine in Denver is now a naked body scanner, all of the machines from the security checkpoint I use in New York are regular metal detectors. I find this bizarre. If the number one target for terrorism can get away with metal detectors, why can’t everywhere else? Because people like former head of the Department of Homeland Security (DHS), Michael Chertoff, need to get paid.

Junk Borrowers Are Increasingly “Adjusting Earnings” to More Easily Sell Debt

May 28, 2014 by Michael Krieger

Last week, I wrote a post highlighting increased leverage in private equity deals and the fact that the Federal Reserve was warning of such practices in the piece: Leverage in PE Deals Soars Despite Fed Warnings. In it, I highlighted how 40% of PE deals in 2014 have used leverage ratio above 6x EBITDA, despite Federal Reserve and the Office of the Comptroller of the Currency guidance last year to not breach that ratio.

I noted how ridiculous it is for the institution most responsible for all of the current market insanity to try to come out and talk down leverage ratios. The primary reason all of this craziness is occurring is because the Federal Reserve has intentionally lowered interest rates to such an extent that investors feel they have no choice but to chase the riskiest assets just to catch a few additional basis points. Now we see that junk borrowers are increasingly using tactics such as “add-backs” in order to make earnings look better. This allows low quality borrowers to borrow, while at the same time providing an excuse for investors to buy garbage.

Think I’m exaggerating the problem? According to Bloomberg, 66% of junk-rated bonds sold this year scored by Moody’s Investors Service included at least one adjustment to earnings the credit rater considered “aggressive.” In 2011, the number was just 40%.

Everybody wins right? Wrong. Society will pay a very heavy price for this ultimately.

Video of the Day – The Religion of Consumerism

May 27, 2014 by Michael Krieger

The notion of consumerism as the religion of the United States is nothing new. That said, Warren Pollock did an excellent job explaining just how corrosive this mindset can be to a society. I was particularly taken by the idea that since the vast majority of people define themselves almost entirely by their level of … Read more

License Plate Readers Stir Controversy in California as the NYPD Prepares to Use Drones

May 27, 2014May 27, 2014 by Michael Krieger

One of the many civil liberties related themes I have focused on over the past several years has to do with how emerging technologies can pose a threat, first to our basic 4th Amendment rights, and then ultimately to freedom itself. Two of the most high profile technologies in this regard, and which have extremely high potential for abuse, are license plate readers and drones.

I’m no luddite saying that these technologies should be banned. In fact, I can certainly see reasonable uses for both within a broad range of society. However, I am saying that unless we have an engaged citizenry holding public officials’ feet to the fire, these technologies will certainly be abused and before you know it you’ll find yourself in Room 101 staring down at a ravenous rat army wishing you had said something earlier.

The biggest challenge we face is that the general public has become so dumbed down, distracted and confused when it comes to the most existential issues we face as a society. Rather than focusing on key issues that really matter, the mainstream media largely blows up and obsesses over immaterial, yet emotionally charged events that don’t mean anything in the larger scheme of things.

License plate readers and drones are two great examples of this dilemma. Both have been advancing into our lives in an increasing manner and most people don’t have the slightest clue. How can people have informed opinions on such keys issues when they have no idea what is happening around them.

Let’s start with the license plate scanners. Before reading further, I suggest going back and checking out my post from earlier this year: How the Repo Industry is Collecting Data on Virtually Every Car in America.

Now that you are sufficiently disturbed about the extent to which your privacy is being violated day in and day out, let’s focus on some good news. The fact that there is now a bill in the California state legislature that will attempt to put some boundaries around this technology.

We learn from CBS News that:

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Gotta Keep Dancing – Trading of Penny Stocks Soars to Record on OTC Markets

May 23, 2014 by Michael Krieger

It seems that no market tops until the bag has been fully passed to retail muppets, and we appear to be in the process of that happening right now. I have detailed this with regard to credit markets on several occasions, most recently with how Blackstone and other private equity firms are stuffing public pensions with their products using secretive and highly unfavorable terms. In case you missed it, I suggest reading my post: Leaked Documents Show How Blackstone Fleeces Taxpayers via Public Pension Funds.

Moving along to today’s story, we find that the retail investor is getting back into the stock market and is seemingly focused on the riskiest types of shares; unlisted penny stocks. They aren’t just dipping their toes in either, the pace exceeds that of the tech boom of the late 1990’s and has just hit the highest amount on record.

We learn from the Wall Street Journal that:

Investors are piling into the shares of small, risky companies at the fastest clip on record, in search of investments that promise a chance of outsize returns.

The investors are buying up so-called penny stocks—shares of mostly tiny companies that aren’t listed on major U.S. exchanges—at a pace that far eclipses the tech boom of the late 1990s. Those include firms that focus on areas from medical marijuana and biotechnology to fuel-cell development and precious-metals mining—industries that are perceived by some investors as carrying strong growth potential.

Average monthly trading volume at OTC Markets Group Inc., which handles trading in shares that aren’t listed on the New York Stock Exchange or Nasdaq Stock Market, has risen 40% this year in dollar terms from a year ago, to a record $23.5 billion.

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Diamond Miners in Zimbabwe Told to Sell Gems to Central Bank as Collateralize for Chinese Loans

May 23, 2014 by Michael Krieger

The exploitation of Africa by bigger, stronger and wealthier nations is nothing new. In contemporary times, it appears China has been making a particularly aggressive move considering its huge economy, enormous population and insufficient natural resources. While this topic has not been a focal point on this site, I have covered it in past. Most specifically in a Guest Post from late 2012 titled: Africa in the Crosshairs.

In the article below from Bloomberg, we learn that diamond miners in the country have been told they must sell their gems through the Central Bank to serve as collateral for government loans. The country’s deputy mines had said in earlier in may that “Zimbabwe may use mineral exports, including gold and diamonds, to underwrite loans from China.”

From Bloomberg:

Diamond miners in Zimbabwe have been told to sell their gems through the central bank, which will use the stones to secure a government loan, according to a letter written to them by the country’s mines secretary.

In the letter to miners, the secretary Francis Gudyanga, instructs that producers “prepare parcels of all your currently produced diamonds which must be sorted and evaluated with the involvement of the Minerals Marketing Corp. of Zimbabwe,” a state company, and payment will be made soon after.

The stones will be kept by the central bank and used to “securitize a government loan,” Gudyanga said in the letter. The letter, obtained by Bloomberg, was sent to miners April 28 and came into effect April 30.

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Introducing “Subprime Business Lending” – Loans with 125% Interest Rates Are Being Securitized and Sold to Investors

May 22, 2014 by Michael Krieger

Salespeople said they were told to refer to “short-term capital” instead of loans and “money factors” instead of interest rates. Eight of them said they talked business owners into applying by saying they’d offer a good rate after reviewing bank statements.

World Business Lenders charged most people 125 percent annualized interest rates on six-month loans regardless of their situation, five former employees said. The borrowers often put up cars, houses or even livestock worth at least twice as much as the loan. About one in five were going bust as of last year, two people with knowledge of the matter said. One said that 9 percent of the loans made this year have already defaulted.

“The sweet spot is someone who can limp along well enough for six months but probably isn’t going to be around much longer,” Opportunity Finance Network’s Pinsky said. “They’re in the business of helping these businesses fail.”

– From yesterday’s Bloomberg article, Wall Street Finds New Subprime With 125% Business Loans

The following story represents one of the most mind-bogglingly disturbing reflections of what is really happening beneath the lipstick pigged representation of the U.S. economy the mainstream media regularly portrays. At the center of the story is a company called World Business Lenders LLC, which is staffed with veterans of Jordan Belfort’s (the Wolf of Wall Street) boiler room firm as well other former brokers banned from the securities industry. It sports a business model that lends money at 125% annualized interest rates to small businesses.

Oh, but the story gets better, a lot better. Large Wall Street banks like Goldman Sachs and corporations such as Google are also naturally getting into the market. For example:

OnDeck Capital Inc., a lender with funding from Google’s venture-capital arm and PayPal Inc. co-founder Peter Thiel, sold $175 million of notes backed by business debt last month in a deal put together by Deutsche Bank. Interest rates on the loans ranged from 29 percent to 134 percent.

“Don’t be evil,” right Google? Since there’s nothing evil about 134% interest rates, particularly when you don’t pay taxes.

Of course, predatory lending by bailed out financial institutions is nothing new in post-financial crisis America. I covered this last year in my post: TBTF Banks Enter Payday Loan Business with 500% Interest Rates.

Naturally, Wall Street is also starting to package the loans into securities that can be sold to investors. You can’t make this stuff up.

From Bloomberg:

From an office near New York’s Times Square, people trained by a veteran of Jordan Belfort’s boiler room call truckers, contractors and florists across the country pitching loans with annual interest rates as high as 125 percent, according to more than two dozen former employees and clients. When borrowers can’t pay, Naidus’s World Business Lenders LLC seizes their vehicles and assets, sometimes sending them into bankruptcy.

Naidus isn’t the only one turning to subprime business lending. Mortgage brokers and former stock salesmen looking for new ways to make fast profits are pushing the loans, which aren’t covered by federal consumer safeguards. Goldman Sachs Group Inc. and Google Inc. are among those financing his competitors, which charge similar rates.

“This is the new predatory lending,” said Mark Pinsky, president of Opportunity Finance Network, a group of lenders that help the poor. “And the predators, just as they did in the mortgage market, have gotten increasingly aggressive.”

Subprime business lending — the industry prefers to be called “alternative” — has swelled to more than $3 billion a year, estimates Marc Glazer, who has researched his competitors as head of Business Financial Services Inc., a lender in Coral Springs, Florida. That’s twice the volume of small loans guaranteed by the Small Business Administration.

Wall Street banks are helping the industry expand by lending originators money. They’re starting to package the loans into securities that can be sold to investors, just as they did for subprime-mortgage lenders.

Of course they are.

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