Jul 09 2010
Fly By 07-09-10
Some disturbing but necessary reading out there. If CA leads the country, we are heading for hell. First, the rich are now falling on hard economic times as well, and dumping their mansions in droves:
The housing bust that began among the working class in remote subdivisions and quickly progressed to the suburban middle class is striking the upper class in privileged enclaves like this one in Silicon Valley.
Whether it is their residence, a second home or a house bought as an investment, the rich have stopped paying the mortgage at a rate that greatly exceeds the rest of the population.
More than one in seven homeowners with loans in excess of a million dollars are seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic.
By contrast, homeowners with less lavish housing are much more likely to keep writing checks to their lender. About one in 12 mortgages below the million-dollar mark is delinquent.
Yep, the middle class is holding up everyone now it seems. And if you want to see where liberal policies will take this country, CA is the best example:
The camera focuses on an official of the Service Employees International Union (SEIU), California’s largest public-employee union, sitting in a legislative chamber and speaking into a microphone. “We helped to get you into office, and we got a good memory,†she says matter-of-factly to the elected officials outside the shot. “Come November, if you don’t back our program, we’ll get you out of office.’
The video has become a sensation among California taxpayer groups for its vivid depiction of the audacious power that public-sector unions wield in their state. The unions’ political triumphs have molded a California in which government workers thrive at the expense of a struggling private sector. The state’s public school teachers are the highest-paid in the nation. Its prison guards can easily earn six-figure salaries. State workers routinely retire at 55 with pensions higher than their base pay for most of their working life. Meanwhile, what was once the most prosperous state now suffers from an unemployment rate far steeper than the nation’s and a flood of firms and jobs escaping high taxes and stifling regulations. This toxic combination—high public-sector employee costs and sagging economic fortunes—has produced recurring budget crises in Sacramento and in virtually every municipality in the state.
The US is also running historically massive deficits – for the second year in a row. Yes, I do miss President Bush!
But you don’t need to look at CA alone for the madness of liberalism. Check out the future of health insurance under Obamacare as now evident in MA:
As events are now unfolding, the Massachusetts plan couldn’t be a more damning indictment of ObamaCare. The state’s universal health-care prototype is growing more dysfunctional by the day, which is the inevitable result of a health system dominated by politics.
…
Mr. Dynan added that “The current course . . . has the potential for catastrophic consequences including irreversible damage to our non-profit health care system” and that “there most likely will be a train wreck (or perhaps several train wrecks).”
Sure enough, the five major state insurers have so far collectively lost $116 million due to the rate cap. Three of them are now under administrative oversight because of concerns about their financial viability.
Yeah, Hope and Change.
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A nitwit president heading the biggest collection of liberal losers ever assembled and backed by a racist justice department that has declared war on the American people while the most corrupt legislative body divvies up the spoils of their looting of the productive aspects of society—this didn’t happen over night and won’t be undone quickly.
But this is still the United States of America — the greatest nation in the history of nations because we have survived much worse than the current man made disaster and piccadillos of ego driven idealists—and we will emerge greater, stonger and smarter on the other side.
I just wonder what they will all do for a living and how they will pay for the expensive therapy they will need to recover from accepting the reality that they were all so wrong.
I cannot wait until November. This nightmare might come to an end but it may be that we never totally recover. Worse still is that enough of our population is gullable enough to be taken in by a smooth talking silver tounged politician.
Hitler said this an it is true.
“The broad masses of the people can be move only by the power of speech.”
Hitler used speech to great effect, as did Louisiana’s dictator Huey P. Long. Clinton was an effective speaker and able to touch the emotional heartstrings of potential voters. But Obama is a gifted master.
I disagree. He’s glib, but Obama’s trump cards have been the race issue and a Propaganda Press totally in the tank for him.
I’m worried about what the lame duck Congress is going to do come Nov-Dec. Will they actually pass Card Check and Cap-n-Trade in defiance of the voters? If so, any congresscritters voting for should be tarred, feathered, and run out of the country on a rail.
Elven
I would not put anything past those guys.
If they do pull those stunts and he signs the bills it will seal his single term fate.
[…] against AZ – hotair.com 07/09/2010 Support highest among the least involved. more… Fly By 07-09-10 – strata-sphere.com 07/09/2010 Some disturbing but necessary reading out there. If CA leads […]
Where I live a million dollars buys you a 50 year-old single story housing development ranch style tract home. Still.
It ain’t no mansion.
The reason the million dollar mortgages are failing is that there are a lot of million dollar plus homes in California that are in very modest neighborhoods where people needed very creative financing in order to afford them. Those creative mortgages were short-term (generally 5 years, some longer) and it was expected that there would be enough appreciation now to refinance with a standard conventional mortgage. Well, there hasn’t been any appreciation and people with “reverse amortization” mortgages find a loan balance that has grown while they have gained no or lost equity.
This is 2010. This means that the mortgages let in 2005 are coming due. The worst part for my neighborhood will come in 2012 when the mortgages let at the peak of the market in 2007 come due. That is when people who took out a 1.5 million dollar reverse-am mortgage and now owe 1.6 million discover they have a home worth only 1 million and can’t refinance it. They will take a $600,000 hit if they try to sell it and they won’t be able to refi. They will be out on the street and their credit will be ruined and these are people with GOOD jobs. These are engineers working at Apple, Google, Symantec, Intel, AMD, Yahoo! and other companies.
The crap really hits the fan in about two year’s time, folks. Between the end of the tax cuts and the wave of adjustable mortgages from 2006 and 2007 that will come due … it is going to be a bloodbath.
The column that sparked this website: ‘Land a State Job and Become an Instant Millionaire ‘
By Jack Dean
In 2004, I read an article by Ken Mandler in the Capitol Weekly promoting his seminars on how to land a job with the State of California. I was astounded at what I read and began to investigate the world of public employee pensions. This website and its companion e-mail list was the result (Pension Crisis News Headlines is a daily headline summary that now goes out to more than 1,100 members of the media who write about pensions and benefits).
Following is a more recent version of Ken’s amazing article as it was published last year in August (reproduced here with his permission):
Land a State Job and Become an Instant Millionaire
By Ken Mandler
It’s a tough job saving for retirement. Most of us have difficulty even putting away $500-1000 a year in our retirement accounts. And when the car breaks down — that money goes as well!
Others have access to 401(k) programs at work and employers sometimes match the contributions with up to $4-5,000/year. Then again, during bad profit or no profit years, the employers utilize that ubiquitous phrase “subject to change†and provide no match. Or they merge and change the “planâ€.
But California state government employees have an employer who regularly and by law provides a $40-50,000 contribution to each employee’s pension account — year in and year out — good budget times and bad. (And in bad years they borrow the money!)
The California state government provides a “defined benefit†pension plan to each of its employees. Such “defined benefit†pension plans are far more generous than any 401(k) or defined contribution pension plan available from any other employer in the state! In fact, the plan is so generous that it makes the average state employee a millionaire after only 22 years of work!
Here’s how it works. Say you start working for the state at age 41 and retire at 63. The average state employee makes $55,625/year in salary — and that’s before benefits! At the age of 63, you’d be able to retire on 55% of your pay rate — 67.5% if you purchase 5 additional service years at a pretty nominal cost.
That’s 67.5% of your final pay. Let’s say you retire at the average state employee pay rate of $55,625/year — your annual pension for life would be $37,546/year. Currently state employees are saving $1.8 billion of their money in the State’s Pooled Money account which pays only 2% per year in interest. However, Let’s say you were able to earn an interest rate of 3% on your retirement account — how much would you have to have in that account to yield an annual benefit for life of $37,546?
Here’s how you calculate that amount — you divide $37,546 by 3% ($37,546/0.03= $1,251,562). To provide this level of annual pension on your own would require you to save $1,251,562 during your 22 year working career between the ages of 41 and 63. Could you do that on your own?
It would require putting $56,889 ($1,251,562/22 years = $56,889) into your 401(k)/IRA or other retirement account every single year during those 22 years! When you work for the state, the state does this for you!
Is the state’s pension plan overly generous? The Sacramento Bee and Governor Arnold Schwarzenegger have been whining about it lately — are they jealous? The state’s own Legislative Analyst has determined that California’s pension plan provides nearly twice the benefit of the next highest state.
Other comparisons are in order. The vast majority of American corporations have now eliminated “defined benefit†pension plans — only 6% of Americans in the private sector have access to such plans. American companies have terminated over 17,000 such plans in the last 20 years. IBM, one of the bluest of the blue chip companies, terminated its “defined benefit†pension plan in 2005. Hewlett Packard, a major California employer, followed by terminating its plan later that same year.
You’ve seen the headlines this year about possible changes in the state’s pension plan. However, that shouldn’t stop you from signing up today as your pension is guaranteed the moment you land a state job. They can change the benefit for future employees — but not you!
Landing a California state government job is not an easy process as everyone wants to be a millionaire! And you are a millionaire the moment you land a state government job. Capitol Weekly’s How to Get a State Job Workshop provides valuable insights into landing a California state government job. Sign up for the August 28th class today!
Ken Mandler teaches a monthly workshop on How to Land a State Job. The workshop focuses on a variety of tactics and strategies designed to make the state job process an effective one for you. The workshops are 3 hours and include over 400 pages of information for your review. The cost is $84. You can sign up at http://www.statejobworkshops.com or by calling Ken Mandler at (916) 443-6788 today. You can e-mail Ken Mandler at ken.mandler(at)capitolweekly.net.
Jack Dean is president of the Fullerton Association of Concerned Taxpayers and editor of PensionTsunami.com.
SBD