National Treasury Union President Colleen M. Kelly recently described the 2014 IRS budget allocation as “woefully inadequate.” But the agency has not proven itself to be an efficient steward of taxpayer dollars. Here are ten ways the IRS lost the trust of the American people.
It’s easy to be negative about the U.S. economy these days. Find a glint of silver, and folks come running to point out all of the dark clouds looming about. This, of course, is what we got last week when the monthly jobs report was released from the U.S. Department of Labor (DOL). Folks pooh-poohed the number of jobs and whining that they’re not enough or that it’s less than a bunch of economists thought that it might be. But you know what? Stuff ’em.
Given how poorly states like California and Illinois have funded the pension funds for their own employees, one would think that this would stop dead in its tracks any plan to have the government assist in managing private sector funds too. The spate of recent activity, however, suggests otherwise.
The financial world is plodding along like a drunken sailor avoiding debt collectors by keeping no cash in his wallet. It’s not the kind of calm that’s going to last or end well. But the storm will have to wait until after the Olympics.What a game! We’ve never watched ice hockey closely before. But watching […]
President Obama crowed in his State of the Union speech about the economy, even mentioning “a rebounding housing market.” Maybe he was referring to friends in high places, like the seller of Penthouse One in New York, which just closed for $50.9 million, all cash. Millions of mere-mortal homeowners likely wanted to throw something at […]
The nonpartisan Congressional Budget Office is acting in a bipartisan way to cover up the biggest single threat to the bipartisan political alliance that is stripping America of its wealth: the United States Congress.There is no question that the following policy is bipartisan. Democrats and Republicans in Congress are completely agreed that the following information […]
Amidst all the revelations about how the American people, many of whom are absolutely convinced they live in a free society, have their telephone calls, emails, website visits, and who knows what else under surveillance by their own government, let’s not forget the massive infringements on financial privacy that have gone on for decades.Consider, for […]
The exercise had an awesome name, inspired by the movies: “Quantum Dawn 2.”On July 18, scads of U.S. banks, stock exchanges and government agencies took part in a digital fire drill — a practice run in the event all of Wall Street came under massive cyberattack.This isn’t the first time banks have come under an […]
The faces of the Detroit bankruptcy are the thousands of pensioners whose promised benefits are suddenly part of the restructure negotiation. When Motown filed for Chapter 9 last July, the city had $11.5 billion in unsecured liabilities. The vast majority of this was pension and health care benefits owed to retired city employees.The images of […]
The Largest Company in History:“The United States Corporation of Government (USCOG)”I follow global social and commercial networks, looking for entrepreneurial opportunities.Innovation surges when industry and government models change. Buggy whips. Landline phones. Railroads. The Soviet Union. Apartheid South Africa. All marked social and commercial innovation, both bad and good.We are witnessing a new form of […]
We’d like to give the banks in Australia some credit. They’ve finally gone and done it. They have caught up with 1960s technology. They’ve figured out how to use PIN numbers.How to only use PIN numbers, that is. They’re considering scrapping signatures on credit cards to cut down on fraud. Apparently, having to verify your […]
We put in a good-citizen call to the SEC the other day.“There’s a massive scheme to manipulate stock prices,” we told the friendly agent.“I have to tell you that your call is being monitored so that we can better serve the public,” he replied.“Oh, don’t worry about that. The NSA is tapping our call anyway.”“Are […]
No other price pops during a boom like that of condominiums. The common view among savvy real estate types is condos are the last to jump and the first to crash. A decade ago, Bernanke’s post-Sept. 11 easy money fueled condo prices and in turn high-rise residential construction from coast to coast.In downtown Miami, 22,200 […]
Our grandparents believed in the value of thrift, but many of their grandchildren don’t.That’s because cultural and economic values have changed dramatically over the last generations as political and media elites have convinced many Americans that saving is passe. So today, under the influence of Keynesian economists who champion government spending and high levels of […]
So Janet Yellen’s first hearing took place a few nights ago. It was fairly boring. She’s expected to sail through and become the next chairperson of the Federal Reserve. Given that the last few years of extraordinary monetary policy have achieved a miserable recovery, what’s she going to do differently?Nothing. Just more of the same. […]
Imagine that everyone in your community is issued a credit card with the same account number. At the end of every month, the bill is totaled and divided equally among you. Suppose that during the first month, you choose not to use the credit card, yet you receive a bill for $100. The next month, […]
From the Tongue-in-Cheek Department of Laissez Faire Books…Washington, D.C. – Jeff Incast, a Democratic representative from California, has tabled a bill that would expand current insider trading laws.He said he was “distressed” by the acquittal of Mark Cuban, whom a jury cleared of civil charges of insider trading brought by the Securities and Exchange Commission […]
Hanging out in Rome, surrounded by ruins of all ages, you can’t help but have big thoughts about the state of the world. Here are a few of mine.No generation during the long fall of the Roman Empire was really aware of it. Each generation accepted the conditions they inherited and worked to survive as […]
I just spoke to a friend, Skinner Layne, who is from Arkansas, but now lives in Santiago, Chile. He emigrated there and is now heading a startup enterprise that is showing great promise. It is called Exosphere. I asked him about the backstory to the company. It turns out that he moved in 2008, six […]
The dream of virtually every American is to retire as early as possible. Who doesn’t want to have each and every day to do exactly what he or she wants to do?Sure, for some people, that would be work. They like having somewhere to go every day, being valued for their services, and the interaction […]
It’s come to this: A typical family’s health insurance costs as much as a typical family car.If you’re a typical American family, your “health” will set you back $20,728 every year. That figure comes gratis of Milliman, a benefits consulting group. A base-model Toyota Camry… the typical family’s most-popular make? It costs $22,055.Milliman’s numbers account […]
The study of crowds has always fascinated people in finance. It’s not hard to understand why. Markets can go to crazy extremes, extremes no one can make sense of. So, one favorite way to explain it away is to say that crowds do dumb things that individuals, upon cooler reflection, would never do. In a […]
Since before the tech bust, we’ve been suggesting that while Americans “think” they’re getting richer… they’re actually heading in the other direction. They’re getting poorer.This proposition has been easier for folks to entertain since housing busted and the financial crisis reversed the “wealth effect” in 2008. With that in mind, let’s take a look at […]
People will be paying more and getting less from their governments as health costs and pension obligations will force state and local governments to adjust their budgets over the next 50 years, according to a new report.The new report from the Government Accountability Office, a nonpartisan congressional agency that audits federal programs, paints a dreary […]
The countries of the developed world are experiencing a new class of refugee — members of the middle and upper classes. These rungs of the socioeconomic ladder are realizing that their countries of residence are in many ways going rapidly downhill without much hope of a short- or medium-term reversal. This is particularly true for […]
People seem to do the craziest things when it comes to money. They chase stock market bubbles. They throw good money after bad investments, like a home that’s hopelessly underwater. They spend and spend while racking up crushing debt. They destroy their own businesses with dishonesty and deception.Given all of this, the idea that individuals […]
The 20th century was an age of big business. And investors did well backing the giant blue chips on their march to glory. But those days are over. In its simplest terms, my thesis is to bet with the small guys.I think of them as cottage industrials. A cottage industry brings up images of small-scale, […]
Real estate, and the careers that depend upon it, is a boom-bust business in the age of inflation. The illusion of wealth is everywhere..until it is snatched away.
That’s why it’s a great time for David Mamet’s Pulitzer Prize winning “Glengarry Glen Ross” to make its third appearance on the Broadway stage. It’s a show about Chicago real estate salesmen selling Florida properties through deception and intimidation.
The show appears just as Iowa dirt ascends to new heights, hope springs eternal that home prices have stopped falling, and Bernanke’s tonic is finally putting some sizzle in the home market.
I’m a huge fan of the movie, as those who attended last year’s Vancouver Symposium may have detected. When asked during the Whiskey Bar panel what movie depicted the U.S. economy, I offered up “Glenngary Glen Ross.”
I was sky high with anticipation taking my seat on 4th row. I was not disappointed. Broadway is indeed magic, especially when you can see the shine on the actor’s shoes and spit flies as they say their lines.
Reviewers are carping that the production is nothing but a vehicle for Al Pacino, who plays deluded has-been Shelly Levine. Maybe, but Bobby Cannavale steals the show as Ricky Roma, the role Al Pacino earned an Oscar nomination for in the 1992 movie version.
Cannavale brings more swagger to the Roma role than even Pacino did. He combs his slick Guido-style hairdo using his sun glasses as a vanity mirror. He looks to have stolen his suit, suspenders, white-collared shirts, and argyle socks from Gordon Gecko’s closet.
The audience was on the edge of their seats ready to react to any utterance or facial expression Pacino would produce. Still, his portrayal of ‘The Machine’ did not have the Willie Loman desperation that Jack Lemmon brought to the role on the big screen.
John C. McGinley on the other hand makes for an even angrier Dave Moss than the Ed Harris movie version. If there’s a plot to Glenngary, Moss is its protagonist. It is his desperate plan to do something, rather than just being stuck with the deadbeat sales leads, that puts the Premier Properties office in turmoil and sets up the climax.
Real estate investment is an opportunity. We paraphrase that great investment mind Ricky Roma, the alpha male salesman at the top of his game. Investments can teach a man about himself, as Roma waxes philosophical to the lonely James Lingk. It’s the power of suggestion plying the vulnerable.
In real life today, there is no shortage of vulnerable, especially not in Sioux County, Iowa.
On October 25th in Iowa, no spell was needed to entice buyers of fertile Iowa farmland. No condos or McMansions will sit on this land, only corn or soybeans. Auctioneers took turns taking bids as prices climbed for 80 acres in this heart of corn country. When bidding hit $20,000 per acre, reported an observer, “you could hear a gasp in the room.” Applause broke out when bidding stopped at $21,900.
It’s been awful dry in the midwest, but the land market continues on fire, with prices up over 31 percent in the past five years, according Bloomberg Businessweek. Yep, it’s a no-brainer; income from crops “and the long-term appreciation of the property,” professor Michael Duffy opines.
In a similar way, the Toronto condo market has defied reason and gravity for years, enticing investment from around the world. One reason is that people like Herbert Crockett believe in the old saw, passed on to him by his father: Invest in things you can touch. So Mr. Crockett took the plunge on a Trump Tower Hotel condo for C$904,000.
The “Trump” salesforce told Crockett he would rack up between a 5 and 27 percent annual return from his investment in the big-name project. That sure beats the 2.25% regulated rate banks are paying in Crockett’s home in France. “We bought into the Trump name and what we were being told was a hot real estate market in Toronto for this kind of project,” Crockett told Bloomberg in an interview. “It turns out that the hotel had nothing to do with him and that it isn’t a good investment after all.”
The Toronto market, with more condos under construction than any other city in the world, is now beginning to soften and Mr. Crockett and others that bought are only renting their units a quarter of the time projected. Instead of receiving a monthly check from his investment, the retired HR director is now losing C$7,000 a month according to his lawsuit.
Although the Donald was featured prominently in Trump Tower sales literature, he and his staff were not involved in the development other than selling his famous name to the project and attending the grand opening. An attorney for Trump said, he “was not involved in the sales process and Talon, the developer, made no representations to buyers regarding return on investment.”
But while the Trump legal staff paints the picture that he didn’t have anything to do with Toronto’s tallest building, evidently EVP and daughter Ivanka didn’t get the memo. “We look forward to continuing to achieve great success at Trump International Hotel & Tower Toronto,” she told Bloomberg in an email. “Our team is dedicated to providing world-class service and amenities only found in a Trump Hotel Collection property.”
Great success? Well, yeah. “The hotel is an unbelievable success,” Trump attorney Alan Garten says. Hey, occupancy might not be great. Investors might be losing money. But, the Canadian Automobile Association has awarded the hotel restaurant’s a four diamond rating and TripAdvisor.com rates the Trump Hotel tops in Toronto.
Mr. Crockett has hired lawyers to fix his mistake. In his court filing, Crockett contends he is “the victim of an investment scheme and conspiracy based upon reckless and negligent misrepresentations.”
With the Toronto boom turning into a bust, the advice of Mr. Crockett’s late father is not so sage. It turns out he’s an investing neophyte. “These are not sophisticated investors,” said Javad Heydary, who heads the law firm that is suing the developer and Trump for Crockett and 20 other investors. But the developer’s head man says this is all just a case of “buyer’s remorse” and the plaintiffs just want to get out of their deals.
What were dreams and opportunities in a boom, become in the bust the fraudulent schemes of court filings. The charming and helpful salesmen are suddenly liars and crooks. “There’s the illusion of movement in the Toronto housing sector with sales and buyers,” Crockett told Bloomberg, “But now it seems more like a Ponzi scheme.”
Central bankers can print money and for a while, in some markets of some things, create the illusion of wealth and prosperity. There will always be salesmen around to facilitate the transaction — Glengarry style. But neither the Fed nor the salesmen can stop the busts, the ruined lives, and hard feelings. The money printing and money manipulations — all taking place on a epic scale — only creates more.