• Tag Archives California
  • The US Suffered 15 Billion-Dollar-Plus Weather Disasters In 2017

    In the year that President Donald Trump pulled out of the Paris accord and downplayed global warming as a security threat, the US received a harsh reminder of the perils of the rise in the planet’s temperature: a destructive rash of hurricanes, fires and floods.
    According to Bloomberg, the US recorded 15 weather events costing $1 billion or more each through early October, one short of the record 16 in 2011, according to the federal government’s National Centers for Environmental Information in Asheville, North Carolina. And that tally doesn’t include the recent wildfires in southern California, one of which grew to be the largest fire in state history, according to Bloomberg.
    Among the most devastating events were hurricanes Harvey, Irma and Maria and wildfires in northern California. The killer storms caused economic losses of more than $210 billion in the U. S. and across the Caribbean, and about $100 billion in insured damages, according to Mark Bove, a senior research scientist with Munich Reinsurance America in Princeton, New Jersey.

    This post was published at Zero Hedge on Sat, 12/30/2017 –.


  • Jihadist Group Blows Up Oil Pipeline In Iran, In Midst Of Protests

    In the year that President Donald Trump pulled out of the Paris accord and downplayed global warming as a security threat, the US received a harsh reminder of the perils of the rise in the planet’s temperature: a destructive rash of hurricanes, fires and floods.
    According to Bloomberg, the US recorded 15 weather events costing $1 billion or more each through early October, one short of the record 16 in 2011, according to the federal government’s National Centers for Environmental Information in Asheville, North Carolina. And that tally doesn’t include the recent wildfires in southern California, one of which grew to be the largest fire in state history, according to Bloomberg.
    Among the most devastating events were hurricanes Harvey, Irma and Maria and wildfires in northern California. The killer storms caused economic losses of more than $210 billion in the U. S. and across the Caribbean, and about $100 billion in insured damages, according to Mark Bove, a senior research scientist with Munich Reinsurance America in Princeton, New Jersey.

    This post was published at Zero Hedge on Sat, 12/30/2017 –.


  • California Supreme Court Set For Ruling That Could Cut Pensions For Public Workers

    For decades now public pensions have been guided by one universal rule which stipulates that current public employees can not be ‘financially injured’ by having their future benefits reduced. On the other hand, that ‘universal rule’ also necessarily stipulates that taxpayers can be absolutely steamrolled by whatever tax hikes are necessary to fulfill the bloated pension benefits that unions promise themselves. Alas, that one ‘universal rule’ may finally be at risk as the California Supreme Court is currently considering a case which could determine whether taxpayers have an unlimited obligation to simply fork over whatever pension benefits are demanded of them or whether there is some “reasonableness” test that must be applied. Here’s more from VC Star:

    This post was published at Zero Hedge on Fri, 12/29/2017 –.


  • Two CA Professors Say Farmers’ Markets Racist For Normalizing “Habits Of White People”

    Two California Professors claim that farmers markets racist “white spaces” because they promote “gentrification” in poor neighborhoods where the “habits of white people are normalized.”
    This, according to a new book by San Diego State University geography professors Pascale Joassart-Marcelli and Fernando J. Bosco entitled “Just Green Enough,” an environmental anthology focusing on urban development.
    ‘Farmers’ markets are often white spaces where the food consumption habits of white people are normalized,’ the SDSU professors write, according to Campus Reform.
    [F]armers’ markets are ‘exclusionary’ since locals may not be able to ‘afford the food and/or feel excluded from these new spaces.’

    This post was published at Zero Hedge on Fri, 12/29/2017 –.


  • Do The Double-up! As Rents Rise, More Renters Turn to Doubling Up (L.A. The Worst!)

    This is a syndicated repost courtesy of Snake Hole Lounge. To view original, click here. Reposted with permission.
    Zillow has a fascinating, yet troubling study. It says that rent consumes a growing share of household income in many cities, some people must relocate or find ways to offset rising prices. An increasingly popular way to cut costs is by adding a roommate. Nationally, 30 percent of working-age adults – aged 23 to 65 – live in doubled-up households, up from a low of 21 percent in 2005 and 23 percent in 1990.
    Doubing up is a close relative of young adults continuing to live with their parents. Even though U-6 unemployment is at 8%, wage growth continues to be considerably lower than before the financial crisis. This offers a partial explanation for the doubling-up phenomenon.
    Of course, doubling-up is typical is high cost of living areas like Los Angeles, San Francisco, New York City, Chicago and Washington DC. Not surprising is the doubling-up trend in Mexican border cities like El Centro California, Tucson and Yuma Arizona and El Paso and Laredo Texas.

    This post was published at Wall Street Examiner by Anthony B Sanders ‘ December 27, 2017.


  • California renters will come out ahead with new tax plan while homeowners will see a higher tax bill under GOP plan.

    You constantly hear that owning a home is a no brainer in California because you will always get major tax benefits. Well the new GOP tax plan is actually going to benefit California renters while California homeowners in crap shacks will see higher tax bills. It is an interesting tax proposal because the typical US household owning a typical $200,000 home is going to come out ahead. This is your bread and butter ‘American’ family. However, Taco Tuesday Baby Boomers and Gen X’rs in California have been getting mega subsidies for buying hyper expensive crap shacks. Every tax bill that comes out seems to favor homeowners. In fact, I haven’t seen one that hasn’t favored homeownership. But the way the tax bill is setup, crap shack owners are going to actually have to pay more and renters are going to benefit nicely from the much larger standard deduction. We are now seeing some scenarios where this is playing out.
    Crap shacks getting more expensive
    The L. A. Times has a piece where they examine various households in regards to the proposed tax plan. In one example you have a professional couple that bought a crap shack in Redondo Beach (3 bedrooms and 2 bathrooms – your standard million-dollar SoCal home). They paid $915,000 for the place back in 2016. They are going to see an increase in their tax bill:

    This post was published at Doctor Housing Bubble on December 26, 2017.


  • Mexico Suffers Deadliest Year Ever: Violence Hits Cabo, Tourist Havens

    Local authorities near the beautiful tourist town of Los Cabos on the Baja California peninsula found six bodies suspended from three different bridges this week.
    ***
    Authorities did not want to comment on the details surrounding how the men got onto the bridges, but Reuters suspects ‘drug gangs’, who often hang the bodies of their murdered rivals in public for intimidation purposes.
    According to official data in November, there were more murders in October in Mexico than any other month over the past 20-years.
    Mexico is on track to have the deadliest year ever since modern records began. In the first 10-months of 2017, there were more than 20,878 murders nationwide, as many in the war-torn country have blamed President Enrique Pena Nieto’s failure to tackle drug violence.
    One local prosecutor said in a statement to Reuters,
    Two bodies were found on a bridge in Las Veredas, near Los Cabos International Airport, and two on a different bridge on the highway between Cabo San Lucas and San Jose del Cabo, local prosecutors said in a statement.
    In a separate statement, the prosecutors said two further bodies were found on a third bridge near the airport.

    This post was published at Zero Hedge on Dec 22, 2017.


  • Is California Already In Recession?

    When it comes to the health of his state’s economy, California Governor Jerry Brown has been walking on eggshells this year.
    Twice each year, once in January and again in May, Gov. Jerry Brown warns Californians that the economic prosperity their state has enjoyed in recent years won’t last forever.
    Brown attaches his admonishments to the budgets he proposes to the Legislature – the initial one in January and a revised version four months later.
    Brown’s latest, issued last May, cited uncertainty about turmoil in the national government, urged legislators to “plan for and save for tougher budget times ahead,” and added:
    “By the time the budget is enacted in June, the economy will have finished its eighth year of expansion – only two years shorter than the longest recovery since World War II. A recession at some point is inevitable.”
    It’s certain that Brown will renew his warning next month. Implicitly, he may hope that the inevitable recession he envisions will occur once his final term as governor ends in January, 2019, because it would, his own financial advisers believe, have a devastating effect on the state budget.
    Unfortunately for Governor Brown, the recession he fears may already have arrived in California.

    This post was published at Zero Hedge on Dec 21, 2017.


  • PG&E Suspends Dividends, ‘Uncertainty Related to Causes’ of Bay Area Wildfires. Shares Plunge Further

    California utility goes for ‘cash conservation.’ Investors, not just rate payers, to foot the bill. Wednesday evening, two sleepy trading days before the long Christmas weekend, when no one was supposed to pay attention, Pacific Gas and Electric, the Northern California utility that is being investigated and sued for allegedly having triggered the wildfires in the Bay Area, ‘the most destructive and deadliest in our state’s history,’ as the Department of Insurance had put it, announced that it would suspend its dividend.
    PG&E shares [PCG] plunged 10% in after-hours trading. Thursday morning, shares plummeted 16.5% to $42.75. They’re now down 38% in total since the beginning of the wildfires that killed 43 people and caused still untold property and environmental damage, including $9 billion in insurance claims so far, with the tally likely to rise further. About three dozen lawsuits have been filed against PG&E.
    PG&E’s announcement was terse:
    On December 20, 2017, the Boards of Directors of PG&E Corporation (the ‘Corporation’) and its subsidiary, Pacific Gas and Electric Company (the ‘Utility’), determined to suspend quarterly cash dividends on both the Corporation’s common stock, beginning with the fourth quarter of 2017, and the Utility’s preferred stock, beginning with the three-month period ending January 31, 2018, due to uncertainty related to causes and potential liabilities associated with the extraordinary October 2017 Northern California wildfires.

    This post was published at Wolf Street on Dec 21, 2017.


  • House Passes Tax-Reform Bill – 12 Republicans, All Democrats Vote Against

    Here are the House Republicans who voted against the tax bill, which of course raises the question: With his NO vote, what secret message was Rohrabacher sending to Putin & Assange? pic.twitter.com/B66BY0uIZC
    — Ira Goldman (@KDbyProxy) December 19, 2017

    After more than six weeks of frenzied negotiations, the House of Representatives has passed the reconciled version of President Donald Trump’s tax plan, leaving only one major hurdle between Republicans and their biggest legislative accomplishment of the Trump era.
    In a 227-203 vote, the House passed the tax plan over united Democratic opposition, as well as a flurry of ‘no’ votes from blue-state Republicans who spoke out against provisions in the bill that eliminate deductions for state and local taxesthat will disproportionately impact taxpayers in high-tax states like California and New York. Ultimately, 12 Republicans joined 191 Democrats in voting against the bill.
    The vote followed an empassioned debate with Democrats – who labeled the bill the White House “tax scam” – slamming the bill as an attempt to establish a “permanent plutocracy.” Republicans countered that it would benefit all Americans, and evidence of its sanguine impact on the economy would emerge over the next year.
    The contentious debate that preceded the vote was interrupted several times by protesters, including people who shouted “kill the bill, don’t kill us!” The Hill pointed out that one of the protesters was a woman in a wheelchair who said she relies on Medicaid and warned that the bill would “starve” the public.

    This post was published at Zero Hedge on Dec 19, 2017.


  • CalPERS Goes All-In On Pension Accounting Scam; Boosts Stock Allocation To 50%

    Starting July 1, 2018 stock markets around the world are going to get yet another artificial boost courtesy of a decision by the $350 billion California Public Employees’ Retirement System (CalPERS) to allocate another $15 billion in capital to already bubbly equities. Of course, if this decision doesn’t make sense to you that’s because it’s not really meant to make sense.
    As Pensions & Investments notes, CalPERS’ decision to hike their equity allocation had absolutely nothing to do with their opinion of relative value between assets classes and nothing to do with traditional valuation metrics that a rational investor might like to see before buying a stake in a business but rather had everything to do with gaming pension accounting rules to make their insolvent fund look a bit better. You see, making the rational decision to lower their exposure to the massive equity bubble could have resulted in CalPERS having to also lower their discount rate for future liabilities…a move which would require more contributions from cities, towns, school districts, etc. and could bring the whole ponzi crashing down.
    The new allocation, which goes into effect July 1, 2018, supports CalPERS’ 7% annualized assumed rate of return. The investment committee was considering four options, including one that lowered the rate of return to 6.5% by slashing equity exposure and another that increased it to 7.25% by increasing the exposure to almost 60% of the portfolio.

    This post was published at Zero Hedge on Dec 19, 2017.


  • Here’s An Interactive Map Of Which Housing Markets Get Hit The Most By The GOP Tax Bill

    With the Republican party (and the S&P 500 apparently) convinced they have the votes required to pass their tax reform legislation this week, the folks at ATTOM Data Solutions took a look at which housing markets will be most impacted by new limitations on mortgage interest and property tax deductions.
    First, on the reduction of the mortgage interest deduction to $750,000 from $1,000,000, ATTOM found that nearly 99,000 single family home and condo purchases so far in 2017 involved a mortgage higher than $750,000. And while that represents a small 3.9% of all home purchase loans underwritten so far in the year, per the interactive map below, those 99,000 loans are concentrated in a handful of liberal counties in the Northeast, California and Southern Florida.
    Among 2,022 counties included in this analysis and at least 50 home purchase loans so far in 2017, those with the highest share of loan originations above $750,000 were New York County (Manhattan), New York (63.8 percent); San Francisco County, California (58.0 percent); Nantucket County, Massachusetts (57.3 percent); San Mateo County, California (55.2 percent); and Marin County, California (50.o percent). Among those same 2,022 counties, those with the highest number of purchase home loan originations above $750,000 so far in 2017 were Los Angeles County, California (9,197); Santa Clara County, California (5,543); Orange County, California (4,450); Maricopa County, Arizona (3,723); and King County, Washington (3,715).

    This post was published at Zero Hedge on Dec 18, 2017.


  • California Wildfires Don’t Have to be the New Normal

    To call them devastating is an understatement.
    There have been 8,771 wildfires recorded in Northern and Southern California this year, so far, burning an equivalent of 3,346 square miles. The economic costs, increasing by the day, are now over $13 billion, a figure that will double once the bills from SoCal come in.
    The greatest costs are the human ones, especially the loss of human life.
    There are, of course, certain characteristics about California that make wildfires more probable there than would be the case in South Dakota, but none of them mean that annual wildfires are inevitable. And yet, that is the message we receive from the life-is-hard-therefore-we-need-government crowd.
    Consider this excerpt from the Los Angeles Times story:
    So how did the Thomas fire become such a monster? Heavy winds are one factor. But another is the thick brush that has not burned in decades, providing fuel.
    ‘The fuels in there are thick and they’re dead, so they’re very receptive to fire,’ said Steve Swindle, spokesman for the Ventura County Fire Department.
    The fuel can spread the fire even when winds die down.
    ‘Since it’s so dry out there, it doesn’t take much in the way of winds to create those critical fire weather conditions,’ said Robbie Munroe, a meteorologist with the National Weather Service. We’ll see wind gusts in that … area between 20 and 35 mph, maybe a few mountain sites might see up to about 40, but that’s the most we’re expecting right now.’

    This post was published at Ludwig von Mises Institute on December 18, 2017.


  • Scheme To Pay Off Trump Accusers Emerges, One Woman Was Offered $750,000

    California woman’s rights Attorney Lisa Bloom operated behind a scheme to compensate Trump accusers and potential accusers using money from donors and tabloid media outlets during the final months of the 2016 presidential race, in an effort which intensified as the election neared, report John Solomon and Alison Spann of The Hill.
    Lisa Bloom’s efforts included offering to sell alleged victims’ stories to TV outlets in return for a commission for herself, arranging a donor to pay off one Trump accuser’s mortgage and attempting to secure a six-figure payment for another woman who ultimately declined to come forward after being offered as much as $750,000, the clients told The Hill. –The Hill The various accounts of Bloom’s scheme were detailed in documents, emails and text messages reviewed by The Hill, and come on the heels of Bill O’Reilly’s claim that there is a secret tape of a women who was offered $200,000 to file sexual harassment charges against Trump. It is unknown whether or not O’Reilly’s claim is related to Bloom’s activities.

    This post was published at Zero Hedge on Dec 15, 2017.


  • Humans Fight Back: San Fran Security Robot Attacked, Knocked Over, Smeared With Feces

    Earlier today, we mentioned the bizarre story of a San Francisco animal shelter which was using a low cost, high-tech robot security guard to purge homeless people outside its facilities. The San Francisco SPCA branch had contracted Knightscope to provide a K5 robot (the same model which in July committed suicide at a mall fountain) for securing the outdoor spaces of the animal shelter.
    Why use a robot to chase away humans? Simple: money – it costs the SPCA $7/hour to rent the robot, about $3 less than the minimum wage in California, and according to San Francisco Business Times, the robot was deployed as a ‘way to try dealing with the growing number of needles, car break-ins and crime that seemed to emanate from nearby tent encampments of homeless people.’

    This post was published at Zero Hedge on Dec 15, 2017.


  • California Moves One Step Closer To “Mileage Tax”; Could Require Tracking Your Cell Phone Movements

    Just a few months after implementing a massive 60% hike in gasoline taxes, raising them from $0.297 per gallon to $0.417, the state of California is now one step closer to implementing a brand new tax that would charge drivers for each mile driven.
    As a quick example of how shockingly misguided such a piece of legislation would be, the logical conclusion here is that poor people who have been forced out of cities like San Francisco, Los Angeles and San Diego due to rising rents would now be forced to incur yet another massive tax for simply commuting into city centers to do their jobs…in essence, in many cases, it would serve as a regressive tax on the poorest families…
    So how did we get here? It all started back in 2014 when California passed Senate Bill 1077 calling for a mileage tax. The bill kicked off the California Road Charge Pilot Program which sought to design and test various strategies for implementing a mileage tax.

    This post was published at Zero Hedge on Dec 14, 2017.


  • Robots Purge Homeless From San Francisco Sidewalks

    As the homeless crisis on America’s West Coast forces many cities to the financial brink, one innovative animal shelter in San Francisco is using a low cost, high-tech robot security guard to shoo away the homeless outside its facilities, the San Francisco Business Times reported.
    The San Francisco branch of the SPCA (the Society for the Prevention of Cruelty to Animals) contracted Knightscope to provide a k5 robot (the same model which in July commited suicide at a mall fountain) for securing the outdoor spaces of the animal shelter. Knightscope’s business model allows the SPCA to rent the robot for around $7 an hour, which is about $3 less than the minimum wage in California. According to San Francisco Business Times, the robot was deployed as a ‘way to try dealing with the growing number of needles, car break-ins and crime that seemed to emanate from nearby tent encampments of homeless people.


    This post was published at Zero Hedge on Dec 14, 2017.


  • Senate Tax Debacle: Certain Pass-Through Entities Face Marginal Tax Rates Over 100% Under Current Bill

    As the House and Senate continue to try to reconcile their two versions of a tax plan, the taxing structure for pass-through entities (s-corps, LLC’s, etc.) continues to be somewhat controversial, if not completely nonsensical. As we pointed out last week, the Senate bill somewhat randomly chose to exclude pass-through entities organized as family trusts from tax cuts which would ultimately leave them on the hook for much larger tax bills due to the elimination of other deductions. It’s unclear whether this bizarre exclusion was just an oversight or an intentional political hit on an easy target that no one in Washington DC would dare defend publicly: rich families organized as trusts.
    Now, a new note from the Tax Policy Center lays out some scenarios whereby the marginal tax rate for high-income pass-through entities could soar to over 100%. Of course, while two rational people can debate the impact of a ~40% tax rate on a person’s desire to work, we’re almost certain that a taxing structure that takes more than 100% of your marginal income will be a slight disincentive. Here’s an example of how it works from the Wall Street Journal:
    Consider, for example, a married, self-employed New Jersey lawyer with three children and earnings of about $615,000. Getting $100 more in business income would force the lawyer to pay $105.45 in federal and state taxes, according to calculations by the conservative-leaning Tax Foundation. That is more than double the marginal tax rate that household faces today.
    If the New Jersey lawyer’s stay-at-home spouse wanted a job, the first $100 of the spouse’s wages would require $107.79 in taxes. And the tax rates for similarly situated residents of California and New York City would be even higher, the Tax Foundation found. Analyses by the Tax Policy Center, which is run by a former Obama administration official, find similar results, with federal marginal rates as high as 85%, and those don’t include items such as state taxes, self-employment taxes or the phase-out of child tax credits.

    This post was published at Zero Hedge on Dec 11, 2017.


  • Global Warming Causing California Wildfires?

    Believe it or not, now the Global Warming crowd is trying to claim that the California wildfires are being caused by none other than Global Warming. ‘As global temperatures continue to rise, scientists say the risk of extreme fire seasons across the West is rising, too.’ Anyone who has ever visited the Red Wood Forest in California stands in awe of the grandeur of the place. However, to the shock of many, the redwoods are nearly indestructible. They have evolved to withstand fires. That means, over millions of years, wildfires in California have existed long before humans were even there. The Global Warming people just never both looking at the facts.
    Armstrong Economics

    This post was published at Armstrong Economics on Dec 9, 2017.


  • Tax Bill May Spark Exodus From High-Tax States

    The following is a summary of our recent podcast, “Exodus – The Major Wealth Migration,” which can be listened to on our site here on on iTunes here.
    It’s looking increasingly likely that we’ll see the GOP tax bill pass in the near future. Prepped for signing by the end of this year, the bill is sure to have sweeping effects on all taxpayers, especially those in high tax states.
    Consider Dan White at Moody’s: Taxation Shift Spells Trouble for Underfunded States
    ‘(Eliminating the state and local tax deduction) could help on the margins to drive people from those states to lower tax states because their burdens are going to increase significantly,’ White said. ‘What’s more, it’s going to make it more difficult during the next recession for states to increase taxes without being burdensome to the underlying economy.’
    Many of the Rich Will Pay Under New Tax Plan
    If we take the example of a high-net-worth individual living in California and making $1 million a year, that person’s state taxes amount to $102,000. If that person owns a $1.5 million home, property taxes would be around $27,000. As the new plan eliminates mortgage interest deduction above $500,000, this person would lose the ability to deduct roughly $20,000 in interest expenses.

    This post was published at FinancialSense on 12/05/2017.