The Chief is Really Right Again!

Earlier this week brought great news (as predicted in this space) regarding Bob Kraft–the Patriots owner who “allegedly” solicited a prostitute at a Florida massage parlor. Headlines announced that Kraft would get off.

Link: How Patriots owner Robert Kraft could get off in prostitution case

Horrible pun there but anyway, the prosecutors are offering him a deal that the charges would be dismissed but he would have to admit that he would have been found guilty if it went to trial. Isn’t that the same as pleading “no contest?” Essentially you are saying, “I’m not admitting guilt, but the evidence shows I would have been convicted?” Honestly I’m not quite sure I understand why the offer is so great that he should take it. Kraft isn’t married so it’s not like you have to be publically shamed and your marriage essentially ruined. If I am Mr. Kraft, I’d do the same thing he did with the Patriots when they were accused of spying on the opposing team and using deflated footballs, he did not plea or admit guilt choosing to fight his fines and suspensions each time!

Without going into additional details, Kraft really didn’t do much wrong in my eyes. He paid for a service and a consenting party agreed to the terms. As far as the women being held against their will, I’m not seeing much in the form of arrests. This is hardly the crime of the century but he happened to be a big fish, and sadly (as chronicled in this space), if you have a DA on a rampage looking to be elected to higher office, Bob Kraft is a great fish to get on the line. Now with the case unraveling the DA was forced to offer a “deal”.

The prostitution case against Patriots owner Robert Kraft linked to a Florida sex-trafficking ring could be a long shot for prosecutors — partly because the women he was caught on video with are the 45-year-old spa manager and a 58-year-old licensed masseuse, according to legal experts.
Kraft is charged with two misdemeanor counts of soliciting prostitution after twice visiting Jupiter “rub and tug” massage joint Orchids of Asia Day Spa. Police say the business has ties to an international human-trafficking and prostitution ring, and some of the women at the Asian spa and five other affiliated Florida properties are sex slaves from China.
But it appears Kraft was caught on camera getting services from two women who are not victims of human trafficking: the 45-year-old manager of the spa, Lei Wang, and 58-year-old spa employee Shen Mingbi, also believed to be an operator of the business — both licensed masseuses and Florida residents.

My advice (keep in mind I have just 2 law electives under my belt) do not take the deal. No plea bargain. If you are offering to drop the charges you have no case! Clearly Kraft can run out the clock on this very weak offensive.

Final Thoughts:

This is merely a last ditch effort by a District Attorney desperate to save face, hoping Kraft agrees to the deal, and he can celebrate a “would have been conviction.” As said before, I tend to be more libertarian on these sorts of issues, and Kraft just got very unlucky in a sense it was a brothel under investigation by the police. Just drop the charges and quit wasting taxpayer dollars on this type of frivolous prosecution that is only being brought to advance a political career. If the prosecutor had a solid case he wouldn’t have made such a limp opening offer the Kraft.

By the way, did anyone see the look on Kraft after he heard the charges would be dropped…likely hasn’t been pleasured that much since…..well never mind.

Kraft Singles in action.

If I can offer some unsolicited advice to Mr. Kraft it would be this: avoid BJ’s Restaurant. While you may think they offer a certain something, they don’t; however I’ve heard some members of the wait staff can get you a “wet n reckless.” While some on this blog may wish to engage in a “wet and reckless” with employees at a local salsa bar, this particular “wet n reckless” leaves you broke and dry.

I’m starting to get tired of being right all the time…how about you William?

Robert Kraft is Unfairly Targeted

News broke Friday morning (02/22/19) that New England Patriots owner and essentially a villain to all football fans Robert Kraft was arrested for soliciting prostitution at an Orchids of Asian massage bar in Jupiter, Florida. There was a large press conference, and the police department made it seem as if years of detective work finally took down the Sopranos. Additionally there are way more names to be released and Kraft wasn’t even the biggest customer of this place.

Authorities charged at least 173 people with crimes, including human trafficking and soliciting prostitution. Six people are charged with running the ring.


Victims of alleged human-trafficking ring that ensnared Robert Kraft were forced to live in massage parlors and perform sex acts, according to police

First of all full stop, this is not the first “massage bar” to be busted by the police as a human trafficking ring, and is far from the last. A Massage Envy in Elk Grove, CA had the same thing happen to it. These places are a hot bed (no pun intended) for this type of activity, a massage place that just opened near my office has a sign when you walk in “We offer no additional “services” do not even ask.” It’s even a big running joke with most guys; oh I’m going to a massage parlor, looking for a happy ending.

Robert Kraft expects “Happy Endings”

SO in total about 200 names are going to be dropped, with charges forth coming and I don’t really know why. Let me lay out my case….

First of all Kraft just like any other man decided to engage in a sexual activity at a business, and it sounds like it wasn’t his only trip, I don’t see an issue here. Before you play the morality card, let me add Kraft is obviously in a weird state of his life. His wife died about 7 years ago, he has partied with strippers, hung out with rappers, and even started wearing a gold chain….he is clearly self-destructing. He went to this place for a little rub and tug, and while definitely he has no sense of morality, I don’t see a crime. This won’t play well but I see a nothing burger here, move along and focus on the real criminals in this case.

While he may have engaged in the sex act, it took 2 to tango and sadly this is the part the media doesn’t want you to hear. Kraft is widely seen as a villain, his Patriots have won like 20 Super Bowls in the last 21 years, so he is a manufactured villain. Time to take him down. I remember these conversations in my childhood, ‘life isn’t fair”, “takes 2 to tango”….however that doesn’t apply today, the generation in charge now including the police chief, DA and others in South Florida are ignoring the bigger picture to snag the “big one.” How come no charges have been announced against the owner? What about charges against those holding the girls against their will? The girls were supposedly kept there and not let out, and silence? Your detectives installed cameras, but you didn’t try to save the girls? Just catch Robert Kraft, a pro golfer, the head of Citibank’s banking division, and so far a bunch of no names? This is the type of backward thinking that has become common over the last 10 years, it’s not about identifying the criminal; instead, it’s about ensnaring the biggest catch. I guess public relations is a path to better funding next fiscal year.

The problem is Police, District Attorneys and judges have far too much power, and it is not more obvious than this! Actually I hope someone has a good answer for why surveillance went on so long. If you think people are in danger you get them help ASAP. If you’re wrong, apologize, pay a sum to settle and move on. In this case, how come we haven’t arrested the human traffickers? Many men are behind this, and a few women too. It’s a horrible crime but it doesn’t feel right making Bob Kraft out to be the bad guy here. The crimes are no laughing matter but seriously? This is how low we have stooped as a country? Completely ignoring Jussie Smollett and his half-baked crime?

I just see an old man helping out a local small business. Kraft also makes for great headlines, Spygate…Deflategate….now……Tailgate? Additionally, why does everyone say they “look forward to their day in court?” People actually look forward to that? When I hear that I mark down guilty.

Kraft also openly supports President Trump so I wonder if this is political payback for his support of Trump. Clearly, the league favors the other party.

It has come to the attention of this blogger that there is a movement underway to make Mr. Kraft sell his team.

Regardless of the eventual outcome in the investigation in general or Kraft’s case in particular, this is an opportunity for the NFL to live up to the moral standard it touts so fervently. Sports writer Jane McManus called on Saturday for the NFL to ban Kraft from the league if the allegations are true…


Robert Kraft’s arrest is a chance for Roger Goodell to show the NFL is serious about its morality policies

Apparently we live in Soviet Russian where the governing powers can just force you out with little notice. I think there is a racial element at play here. 90% of the NFL players are black, the owners are overwhelmingly white, and players can be suspended for conduct such as DUI, domestic violence, drug/gun charges and the like, owners really cannot be. This reeks of a way for the players to punish someone who is without a doubt is one of the most popular owners in football with fans in the “New England Area.”

Stay tuned folks,

“The Chief”

Carma-geddon or Car-mageddon?

William, the Blog Father, and I met for lunch a couple years ago and both us had our “tin foil hats on” according to the cheerleaders of this disaster of an economy. A ton of issues were discussed but one item I brought up could reign supreme very soon, the topic of the car loan market. More specifically I spoke about the fact that the market was being flooded with subprime auto loans (not standard loans, think the No Income, No Job, No Assets, No Problem loans for homeowners during the meltdown a decade ago).

For a time, my prediction seemed baseless and unsubstantiated. There was nary a word from any media at all, until Wednesday, when CNBC had an article about it. As predicted at our lunch many years ago, its jaw dropping folks. William runs this site and perfection is not asked for, it’s demanded. We stand behind our predictions, and in this case I wish I was issuing a retraction. Here are some brutal highlights from the article:

  • 7 million American borrowers are at least 90 days behind on their car loan
  • 1 million more than 2010, when we went through the credit crisis
  • Total auto loan debt has increased by 584 billion, the highest levels ever recorded by the FED

Link: A record number of Americans are 90 days behind on their car payments

When I digest these numbers, even I myself, the “Nostradamus” of this crisis, am somewhat dumbfounded….aren’t we told that we are in a period of major economic growth and expansion? I am told the stock market is making new highs almost weekly; wage growth should be keeping up as well right? Problem is while most of the above is true, the results say otherwise. We have had economic growth, largely due to low interest rates; this carries over to the stock market increasing to all-time highs. What I am saying is you cannot earn a decent return in a savings account so as a result you invest the money, driving the market up. Corporations, can make loans on the cheap through a bank to finance a large acquisition, like Kuerig buying Dr. Pepper Snapple, or Pinnacle Foods being bought by Conagra. I cannot blame these corporations just like the ones who borrowed money just to juice earnings returns, but back to the car aspect of this blog.

During the last 9 years, banks were able to borrow money from the Federal Reserve Bank for 0% interest. Subsequently, they lent it out at far higher rates of return depending on your credit or FICO score. To sum this up, the bank is taking zero risk, and you the borrower are at their mercy.

So how does this pertain to the above article? Well you walk onto a car lot or dealership because you need a means to get to work. Just like that, you are circled by the vultures posing as car salesman. I say posing because they don’t care about you, they see you as a sale not a person. Don’t believe me then go see for yourself. These dealers will literally hire anyone. Still don’t believe me, these people make money only when they sell, not so much when they are standing around, so when they find a live warm body, you’re dinner! You’re literally their meal ticket because they are on commission and without selling to someone like you, they don’t eat.

Since you need a ride to get to work, they don’t want you to see the affordable compact commuter car. Oh, you have a family then you need that SUV, or crossover, or full size car….think about going to the beach, or snow, or grandma’s house then get our all-wheel drive car over there! You test drive several, and you make a decision. You decided to buy a little more car than you needed but it’s ok because it will pay off in the long run. The sales guy made you feel like a million bucks, sadly, you don’t have said millions so you finance the purchase.

The finance guy (known as “The Closer) sets up a payment plan…0% APR right? Isn’t that what the ad said? Well not in your case but we can probably do it for 15%. Then he runs your credit. You can’t make the payment over 48 months, so….let’s make it 72 months, and maybe it becomes 29%, but you need to get to work and the payment works so you sign. Congratulations Chief, you are now the proud owner of a new car or used car. It’s a ton of payments but we know you can afford $475 a month. Read the last part again. You got taken but you don’t realize it yet. You whip out the credit card for the down payment, you need the car now but it won’t be ready until tomorrow.

Excitedly, off you go in your new vehicle. Typically you get 45 to 60 days before the first payment is due. The first couple payments are a bit of a struggle but you make them. Eventually a life event happens or other bills just increase as they always do. (Seen what rental prices are doing lately?) All of a sudden a couple years into the loan, you realize you bit off too much but too bad. The car sales guy, he may or may not work there anymore, the finance person, ditto however both got paid up front. Keep in mind there is no fiduciary duty law in this business.

Paul Blanco Auto–got a pulse, get a car

A local car dealership (Paul Blanco) literally runs ads saying we will get you in a car even with bad or no credit…and hence we have this auto loan issue. Frantically you call seeking to work out a payment plan…sorry the car is worth less than you owe, no refinance options exist Chief. Surely your credit union/bank can do something for you, you have been with them for years…negative Ghost Rider. Sadly your car is worth more repossessed even if you keep making payments on it. Surely this is usury or something, there has to be a way out…sorry, no one can help you. By the way, your car will be repo-ed and they will sell it again to another sucker, lather, rinse, repeat.

“Whatcha gonna do when they come for you”

If you pursue legal action, you have no leg to stand on since you signed the papers. You also will find out the law firm hired by the finance company is Dewey, Skrewem, and Howe…while the in-house finance company hires law firm Howie, Keepum, Kurent. You were took, and are now on the hook, just another statistic in the actuary’s book. The sad cold hard reality is you need a car to get to work, you bought too much car, and got saddled with a high rate loan on a vehicle whose value depreciated tremendously upon leaving the lot. We never learned our lesson from 2008, and we are going to repeat it yet again, in a way that is going to be cataclysmic to the economy and credit markets. As pointed out earlier on this website, you won’t be getting that large tax refund to bring your payments current.

In this case I do wish I was wrong, however I was Really Right.

Financial Literacy is at an All Time Low

While conversing with an old college friend the topic of money and debts came up, my degree being in finance I offered to lend a hand. My friend also graduated with a degree in finance from the same college I did. My friend told me she was barely making ends meet. She is single and lives in the Bay Area and makes a decent salary of about 60k a year. She had amassed 35k in credit card debt, and has about $150k in student loan debt; credit card debt notwithstanding this is about normal for a young professional in their 30’s nowadays.

We are told Credit Cards are the way to happiness

We cannot focus much on the student loan debt, because truth be told, without that degree you cannot even apply for a job at most places. This person is gainfully employed, so they have a paycheck going in their favor. What is the credit card debt about? This was a very painful discussion that initially ended with me saying if you’re not going to be forthcoming, the discussion would move on to another topic.

She began to open up. She revealed that she doesn’t cook so she eats out twice a day. The cardinal sin isn’t so much she is eating out, it’s that she is going to happy hour. Happy hour involves alcohol, and salt filled appetizers at a great teaser rate. I know this too well; you grab a tall one, then order up the wings, egg rolls and chips and salsa for just $11.99. Then upon finishing your appetizer you want another tall beer, then maybe one more, before deciding you probably better order food because its dinner time now…..$15 happy hour just became $70, possibly more with tax and tip……don’t worry just put it on the card! You get up tomorrow morning and need something to cure the hangover so you grab fast food, and spend another $10…lather rinse repeat. Those charges add up.

Reluctantly she went on that she spent quite a bit of money trying to keep up with the Jane’s and Kardashians of the world. I cannot relate to this, I am a guy, and as William can attest I usually have the same shirts, jeans or whatnot until it is ready for Goodwill…but I digress. In addition, I found a premium cable package, gotta watch the soaps every week, and binge watch on weekends. A home phone? ….if you’re under ago 60….lose it ASAP. A brand new iPhone, with a cancellation proof guarantee of a three year contract built in. A gym membership……where she went one time. This friend was in desperate need of help, I was there to advise, but I told her she isn’t going to like what she hears, but it’s got to be done.

The truth of the matter is she doesn’t need a diet, she needs a lifestyle change, and poor decisions have begat more poor decisions. A couple notes prior to me telling the advice that I gave her; she drives an old car and lives in a decent area, by no means high rent district. No car payment, and it’s not my place to tell a girl to live on skid row or somewhere not safe in order to save a buck.

My advice to her was her ditch the gym membership and commit to going for a walk during her break or lunch and park near the back of the parking lot at work. Ditch cable and the home phone. If you don’t think you can live without cable, try Hulu or Netflix or both. The cell phone is problematic however you have agreed to a contract so maybe try to negotiate a lower plan or something, this is the danger of brand new items. Take cooking classes, watch YouTube cooking videos, or I guess if you keep cable watch Food Network. The amount of money you spend eating out daily ads up quickly. What you spend in the course of just one week would likely covered groceries for a month. The key here is McDonald’s dollar menu seems cheap, but the food is loaded with chemicals that make you crave it for lunch, then dinner and a possible late night snack. Your waistline will thank you as well. In addition don’t think eating out for healthy food is the answer either. Salads cost more than $11. Subway may sound good and in some cases can be healthy but costs can add up quickly. The goal here is that we found quite a bit in monthly savings and we could apply this to debt service, starting with the 25% interest rate credit card debt. In her case the student loans were subsidized at 5.5% and honestly the least of her worries.

We found a potential of $800 per month in savings if she can implement the lifestyle changes that we discussed. This doesn’t sound like much but if she remains diligent, it will substantially cut into the credit card debt. Contrary to most people’s opinions, I told her keep the cards, do not cut them up, and in fact keep using them. Dave Ramsey won’t agree, but the way I see it, cash has a way to disappear with no accountability, with a credit card your charges are all itemized out each statement cycle. This is a way of keeping yourself honest, while also paying down the balance.

This plan is a roadmap to achieving a level of financial freedom and other people may have issues with the particulars but if the plan is maintained, it will work. I have to give my friend some kudos, she had her degree, and even found some additional work to provide a little more $$$ on the side. However this is where the kudos end, and cold reality of the world we live in sets in. The plan was not followed….well it was for about 6 months. Reality is a doozy in this case, but well here is the rest of the story as Paul Harvey used to say.

Paul Harvey

In the case of my friend, she reduced her credit card debt to $17k in just 6 months’ time, everything was going well, then she went back to her old ways. It’s true, you aren’t going to meet anyone to form a relationship with sitting at home eating a can of chicken noodle soup, just like it isn’t true living like a miser will make you happy. However if going out to the bar is recipe for eternal happiness I would rather die alone. Credit card debt maxed out now at 45k and the issuer is having no part of a deal involving reduced payments or more credit extensions. All the while rent in her area has skyrocketed and goes up about $150 a month twice a year, further constraining a budget, now the minimum payment cannot be made! That car…well it’s systematically breaking down and becoming a large money pit, you have no option but to keep sinking money into it. The rent issue? Well you need a roof over your head, so you have to keep paying. The student loans? While you don’t have to pay, you cannot discharge these through bankruptcy. She does not have rent money for next month….adding insult to injury, the complex manager is looking for the last 3 months rent. She is at the end of the treadmill of debt…it’s now over, decisions she made and subsequently have continued to make have finally come home to roost. Even worse rather than seek out help or try something productive, she gambles at the local Indian Casino, and plays the lottery, essentially falling for the lie that the easiest way to double your money is betting it all on black. Suffice it to say, she blames me for telling her to keep the credit card, we no longer have a relationship.

Now I will add some commentary. I prefer using my credit card to track my spending and purchases, maybe it was not a great idea, but ask anyone who is a waiter/bartender/valet, cash tends to disappear quickly and there is no paper trail. While I firmly believe in separating needs and wants, the bigger issue is you can be seduced by a want, and you could convince yourself it’s a need….you need a budget. Make a shopping list wherever you go, grocery stores love it when you insist on going up and down every aisle, it’s easier to trick your mind by those fancy SALE stickers. By the way ever notice those sale prices are not as good as the actual sale prices a week later? Impulse buying perhaps?

When it comes to tackling your debt, pay off largest balance/highest interest rate first. The one that costs you the most needs to be paid down first, then apply additional money to next highest interest rate etc. until paid off in full. Take advantage of local non-profits that are there to help/guide you, ditch that “financial advisor” eager to pitch their latest product to you. Suze Orman and Dave Ramsey are two of the best on the radio, free! They also offer classes for a nominal fee and it is well worth it as blogged about earlier. Additionally, this idea of hording a bunch of money in a savings account, when you have existing debt is ridiculous. Just think about it, your credit card issuer is charging you 30%, your savings is earning 2% at best if you use an internet bank…..William said it best, the house always wins. Having a rainy day fund is ok but deal with your debt.

Playing the lotto and gambling is even worse because the atmosphere is created to make you addicted and play more.

If you need to file bankruptcy and start over, so be it, but understand the difference between dischargeable debt (mortgage, credit card, auto loan) and undischargable debt (student loans). Perhaps worse, she started reading a tax website and decided to start looking into buying a house….get this…..for the mortgage interest deduction. Yes, she thought spending $$$ on a house payment each month and getting a bigger tax refund would get her out of debt. Then worse yet, she joined several dating websites ($$$) looking for a special someone. Again seduced by a child tax deduction and a marriage tax break…news flash the marriage tax break is double that of a single one, however your taxable income will be higher. The goal of marriage is not to share the misery of your past mistakes by expecting someone else to fix them so you can double-down on continuing to make stupid life choices. Truthfully, what guy worth having would willingly enter into a relationship with someone carrying all your financial baggage?

The bottom line is that my friend has no chance anymore, except bankruptcy, and even then the road back will be rough. Good luck living anywhere decent. You won’t be driving a new vehicle for a while and worse your credit will stink for many years. However there is good news, we have some of the most generous bankruptcy laws in the world, so fear not in about 7 years you will get to start all over again! I have a customer who’s family is doing just that, they owned a really nice house in my parents old neighborhood, went into foreclosure, filed bankruptcy, and now they are right back at it 7 years later. Bought a house in that same neighborhood, also near the peak of the market, by the way, bought a huge new boat, 3 new cars, and I’m sure this story will once again end poorly soon, but hey it’s America! By the way didn’t Citibank used to have a catch phrase of “Live Richly?”

Buy now, pay later

I guess I may be missing out?

Oh No! Another PG&E Fire

Today we had a tragedy in San Francisco, no the land was not sold to the Chinese as has been rumored.  A large explosion took place…pandemonium ensued.

  • Was this an attack by the Russians ordered by President Trump
  • Was Leland Yee orShrimp Boy” Chow involved? 
  • Was this truly the “big one”?
  • Did the toxic waste at Hunter’s Point go critical?
  • Reports surfaced it was just hot air……. but I don’t recall Aaron or George Park visiting San Francisco to give a speech, so I was dumbfounded. 

I needed answers, I was told London Breed would make a statement soon…. my reaction was London what? Was this a type of dog, new brand of malt liquor, a clothing line for homeless people, a rap singer or something else entirely? What does a breed of anything from London know about an explosion in San Francisco?

Classic London Breed

Well it turns out that San Francisco voters—documented and otherwise—elected a Mayor named “London Breed”, I’m more of a corgi guy myself.

The explosion was a result of natural gas—in this instance, said gas was not created from the contributions of local homeless people accumulating on public sidewalks—but from a ruptured pipeline belonging to PG&E that caught fire and burned several buildings.  Yeah there’s that company again.

Three-story flames could be seen leaping into the air in television images. Police spokesman Robert Rueca says the fire was reported around 1:10 p.m. and there were no immediate reports of injuries.
KPIX-TV reported that the fire started at a construction site.

The Latest: San Francisco blast, fire ignites 5 buildings

  You hate to see it.  Thankfully no one was hurt or killed, but I can’t help but fault this corporation for their blatant stupidity.  They easily could have torched their headquarters and collected insurance money…I may know a guy btw!  It would have been a real shame if the maintenance records and other documents the Public Utility Commission has been trying to subpoena for the last few months were located in said building, but alas your company couldn’t even blow up the right structure…. SAD!

I don’t even know how this works since technically or I guess “allegedly” you filed bankruptcy a week ago.  So, I guess the “ratepayers” are on the hook for this?  I ask because I haven’t seen a gas leak like this since I ate an “extra loaded bean and cheese burrito” at a certain Mexican joint in Elk Grove!  But really, PG&E, I am asking for a friend, do I pay you this month or do I just pay myself since I guess the ratepayers kind of own you now?  However I am glad you found a way to pay out $130 million in bonuses to your top executives!  I hate the idea of taking food off the table from them!

Sadly, this is just more tone deafness from a corporation surprised that “Paradise Lost” is already a movie…. imagine the revenue that idea could have produced. 

Pacific Gas and Electric stock trend for last 3 months

This caps off one heck of a quarter for PG&E, too bad something worthwhile couldn’t have been blown up…like, I don’t know, Berkeley?

What The Government Shutdown Should Teach About Personal Finance

The infamous government shutdown has come and gone and in a rare blog, I’m not going to get or be political at all. I want to focus on personal finance and how close most Americans are to financial ruin. Hopefully you will learn something, if not go study Socialism 101 and hopefully Alexandria Ocasio Cortez wins in 2020.

For the rest of us, the core of our financial problem in American is called a “paycheck.” You know, one bestowed upon any hard-working person; received once, twice, weekly, or bi-weekly every month. “A day’s work for a day’s pay”, or as some would call it, “money received for services rendered.” However, we as Americans have overestimated the paycheck. We take it for granted. We no longer see it as wages earned, but as money to spend; or in some cases, as alluded to earlier in a separate blog, money needed to pay past debts.

Really, in most respects we never learned our lesson from the bank/real estate/credit crisis starting in 2006. People lost homes, cars, jobs, and other material investments. Your 401k became a 104k, and we as a country swore, we would learn our lesson. Truth is we never did.

The year is 2019 and we experienced a government shutdown. Federal employees were forced to work without pay or told to stay home and you would not be paid. Additionally, in the case of TSA workers, they staged sick outs to avoid the punishment of actually having to show up to work. The workers rebelled because they were no longer receiving a paycheck. (FYI once it was over, they were all paid retroactively to the beginning of the shutdown.)

Changing our lifestyle is a lesson we should have learned a decade ago. Companies had mass layoffs, banks and investment firms went bankrupt, the government bailed out Wall Street. We never learned our lesson. How many stories, articles, interviews etc. did you see featuring government workers forced to go to a local soup kitchen or fill out food stamp applications, workers claiming they were about to be thrown out of their apartments, houses? They never learned their lesson. While my heart breaks for these workers I find it very hard to believe they spend their entire paycheck on just housing and food, and if they do, we are in way bigger trouble as a country then I have ever imagined.

The truth is, these people are liars. They have 2 car payments, possibly a boat/rec vehicle payment, credit card debts, and likely spend far too much on entertainment or dining. However, that doesn’t make for a great narrative so we must focus on the single mom of three who is being evicted and somehow that is my fault because I’m undertaxed?

Poor financial choices have been harming Americans for decades. We are fiscally illiterate people. The biggest problem is we have stopped seeing the paycheck as a means of income. Instead, we now see it as a way to pay-off last month’s debts.

Madison Avenue marketing in all its forms, encourages us to swipe a piece of plastic because we won’t see the bill for 30 days and can afford the minimum payment… buy now, pay later anyone?

The truth is, if we actually had to reach into our wallets and pull-out cash every time that we made a purchase, we would behave in a much different manner. But because our money is just so many pixels on a computer or cellphone screen, there is a lack of restraint on our behavior. Our paycheck is not “real.” Its is an ethereal, untouchable, intangible thing.

The crux of the shutdown matter is this: “Does the Government work for us or do we work for the government?” Once that question is answered we will be able to chart our future. If you are a federal, state, county, city, union, etc. employee take heed of my words; you are 100% at the mercy of the taxpayer base. We have a tendency to vote with our feet, and at some point, we may get transportation out of said country. You have just received an early warning, next time you may not be so lucky. The day of reckoning is coming; unfunded mandates are not easily curable by simply raising taxes or increasing the employee contribution for new hires. As a famous person once said, “socialism is great until you run out of other people’s money” …I doubt that person was Alexandra Ocasio -Cortez.

While this should be a kick in the pants for all workers, especially the previously untouchable federal workers, it won’t be. The shutdown is over…crisis averted…I guess? Actually, this is temporary, the next one may be very protracted. We as workers must come to grips with a very stark conclusion, we are beholden 100% to our employer. If you work in the private sector—we all know our paychecks are tied to ebbs and flows in company profits, if you work for the government—your wages are tied to union agreements. In either case, it’s a scary place.

My advice is to get your financial house in order ASAP, not next week, not tomorrow, ASAP. Immediately get all debt under control and limit spending based on needs, not wants.

  • Limit pleasure trips and forgo trading in your car for a brand new one, equipped with a higher payment.
  • Use your cell phone until its obsolete, resist the urge to spend over $1,000 on a new one.
  • Cable is awesome, when you watch it…. consider cutting the cord, you may be amazed how little you miss it.
  • Stop looking at ads in the mail/paper/or in store, they are designed to make you become an impulse buyer, your freezer is full, your pantry is overflowing, you don’t need another flat screen, let it go.
  • That gym membership you signed up for but keep waiting until next week to actually use…. cancel it.

Once you start following these pieces of advice you will find yourself with extra money at the end of each month, resist the urge. This money is not your next payment, it’s found money to save. Extinguish debt, or invest in retirement; however, I prefer starting savings, make a goal of 10% of each paycheck.

Get that savings up to 6-10 months of expenses, now you are your own boss. Something unexpected happens at work, you can take a job you want, as opposed to taking a job for the paycheck to once again, pay off debts. Invest in yourself, learn new skills, and become adaptable, your future you will thank you. Just FYI, calling out sick when you aren’t sick gets you fired in the real world. The fact you drive a basic car, not the latest C class Mercedes will pay off in the future. Have a plan, don’t be the 80-year-old guy or girl working at Home Depot or Walmart because you have too.

My SOTU Prediction

I was asked to make my predictions for the upcoming State of the Union address by President Trump, and here is what you can expect to hear:

  1. The speech will heavily feature the border wall
  2. The bully pulpit will be used heavily
  3. The shutdown will be a central issue

If you think Trump caved on the wall, you are sadly mistaken and likely still believe Russians intervened in the 2016 election. Trump wants to give the State of the Union because, just like Reagan, he knows what to do when the little red light on the camera is red. He is going to light into the Democrats so bad on this issue, Pelosi’s Botox filled head may explode.

Nancy Pelosi–Guardian of Gridlock

Yep I just said it, he is going to twist the few remaining neurons in her brain into a pretzel and then bake it on live television until done. This will be a spectacle for the entire country to see. He is going to invite every family who had a member killed by an illegal immigrant come to the speech, sit in the gallery and clap in unison every time he mentions the need for a border wall.

MS-13 the poster children for unfettered and open borders

Even better those invited will see first-hand the “lawmakers” who claim to be working for their best interests. Get ready, he is going to quote sitting Democrats who supported the wall in days past, and compare and contrast their statements today. Fasten on your chin straps folks, this game promises to be rougher than the Tom Brady show.

Regarding the bully pulpit, you guys haven’t seen nothing yet. Trump is going to obliterate those even in his own Party. I’ll call this gang the “America Caucus.” This caucus tends to form when a critical mass of vertebrate challenged Republicans are elected. The members of this group tend to be the squishiest we have to offer. Think Graham, Collins, Murkowski, and to replace the departing Flake (no pun intended) Mitt Romney is set to join.

The spirit of John McCain still haunts the hallowed Senate Chambers

Trump is going to go hard after them, he wants his border wall and he wants healthcare done, and he isn’t going to take the embarrassment of his last attempt sitting down. No holds will be barred, and this has the potential to look more like the OK Corral than a traditional State of the Union.

The shutdown will be addressed, but I guarantee the threat of another one is on the table. Trump is going to remind the nation that he made a good faith offer to the Democrats and that his offer was rebuked. He will then remind the country that he isn’t a politician, he is a negotiator and when the Democrats won’t work with him, he will call them out. Sound familiar? The GOP tried this type of obstruction under Obama, it failed. The Democrats will fail here as well. This concept of being against everything Trump is fine on paper, but the voters want more.

The Democrat’s –like the GOP congress before them—have offered no alternative. The shutdown being the best example. The Democrats kept telling Trump to re-open the government without addressing the wall. They missed a key chance to win an issue. What if: Schumer and Pelosi ok $5 billion for the wall, but in exchange asked for $20 billion for infrastructure? Trump likely goes for it, he touted his union support during the 2016 elections. Following such a deal, they both could have gone on the TV circuit and basically said they schooled “the Donald” and got a better deal. Yes a small border wall, but you averted a government shutdown crisis, and got lots of good union jobs coming to towns near you! Democrat leaders might even have thrown the issue at Republicans who voted for the budget saying Trump and the GOP are causing record spending due to their reckless wall demand. Don’t kid yourself, $5 billion isn’t building much of a wall. In contrast they showed the American Public they have no ideas and don’t care to negotiate.

Final word: Trump is going to mutilate your Party by using of the State of the Union and the bully pulpit made available to him. He has found his footing and is going full bore after you now. No one will be spared from his wrath. You will see quite a few Reagan like traits from Trump. I am even willing to bet some Democrats or all walk out in unison as a protest.

Pelosi leads Democrat walkout

Also does Trump even like being President? I ask for this reason; he seems to enjoy campaigning and giving speeches more than his work, and I think that is due to him being a former CEO. He wants to do it his way, not concede a bunch and hope he can claim victory in the end.

Tune in for the SOTU speech, I doubt you will be disappointed.

If Howard Schultz is the Answer, What is the Question?

Since former Starbucks Corp founder Howard Schultz gave a 60 Minutes interview that he was exploring running for president as a centrist independent, the left has been buzzing. Quite a few of my liberal friends agree as they feel this gives their nominee a better chance to defeat tyrannical dictator Donald Trump in 2020. They could not be further from the truth, and I’m going to explain why.

Howard Schultz is not very centrist, he definitely lines up with the left more than the right, especially if you look at the policies put into place by Starbucks during his reign as chair and CEO. But I am not going to discuss his politics, I’m going to take his run at face value and assume he will have moderate tendencies.

First and foremost let’s discuss where Schultz will play best on the ballot: Washington, Oregon, California, New York, New Jersey, likely a handful of New England Area states, maybe the upper Midwest, and possibly Florida. On one hand, yes, Schultz would not have a big effect in quite a few stronghold states for the Democrats: CA, IL, MD, and VT and OR.

However, look a little closer at some other states and if you are a Democrat there is major cause for concern: MI, MN, PA, and WI were barely won by Trump (MI, PA, WI) or barely a Hillary state (MN) if you assume Schultz gets 5% of the vote, Trump wins all 4 easily. VA, NV, ME and NH went to Hillary as well, under my formula, Trump would win them all. A couple other states like CO, Trump would barely lose. I think the Left Coast could get real interesting, a poor or wounded Democrat candidate could see Schultz score bigger percentages, leading to a closer call for Clinton winning. How does this help the Democrat cause at all? Now they have to attack Trump on one flank, while attacking Schultz on the other. It does not help their cause that Schultz is a billionaire like Trump and can self-fund his campaign with loads of cash.

Here is the issue, Schultz guarantees Trump wins re-election. The Left would go bonkers, and it would be all due to Howard Schultz. Please run Howard, do it for your country. People forget what H. Ross Perot did for Republican Presidential prospects; Democrats, now it’s your turn. Heck get Mark “#MeToo” Cuban to run on a separate ticket too, the time is now.

H. Ross Perot–Reform Party candidate. Known as a man that’s all ears.

By the way, here is how Schultz became the head of Starbucks….i guess the right to file suit for anything like ADA violations will continue to run rampant under a Schultz White House if elected, and I thought Trump was the bully with all the nasty lawyers?

“When he was running the coffee house Il Giorna, the owner of Starbucks (which then had only six locations in the Seattle area) approached Schultz to buy the six stores for $3.8 million. Schultz, while trying to raise the money, told his Il Giorna investors about the opportunity. One of those investors, who remains nameless to this day, contacted Starbucks and tried to buy out the coffeehouse without any involvement from Schultz. Schultz met with prominent attorney Bill Gates Sr. (yes, the father of you know who), and told him what had happened. Gates Sr. famously stormed into the office of the attempted buyer and told him that he would make his life hell by providing free legal representation to anyone injured on that man’s premises for the rest of his life, and the unnamed Il Giorna investor backed off.”

Bottom line……the only Schultz less qualified to run for President is Charles Schultz.

PG&E Files Chapter 11 Bankruptcy

While it will not be official until January 29th, Today PG&E announced their intention to file chapter 11 bankruptcy so they can reorganize and become an efficient company again. I say it became official today because PG&E did not pay the interest on a bond obligation due 1/15/19. Even worse the company only has enough cash to cover 4% of their fire related obligations, due to their negligence. Chapter 11 is not liquidation, its reorganization. If you’re a stockholder you will be wiped out, a bondholder, you will see pennies on the dollar for your “investment” and if you’re an employee your paycheck and retirement may be effected slightly. However the company will be lent money by investment banks, so your power and gas will still be operational, and rest assured a monthly bill will still show up.

How did we arrive to this fateful day? Well the fires are the easy answer, and as mentioned in an earlier blog SoCal Edison is not far behind. Utilities as a whole are debt laden companies due to the extensive capital expenditures that are supposed to be occurring every year (more on this later) and are 100% reliant on the Public Utility Commission to allow them to raise rates to cover expenses. The fires occurred, they had no reserves and as a result had no cash to make the payment on the bonds.

What is the fallout going to be from this you may ask? As mentioned above your service will not change or be disrupted. Stockholders are wiped out, bond holders get some scraps from the table, and pensions are likely going to be restructured. CEO Geisha Williams was “axed” the question on Sunday and she chose to resign instead…don’t feel bad for her she gets a nice parting gift of 2.5 million severance. (Had she worked for a governmental agency in Elk Grove, she would have got lifetime medical benefits for being fired, too.) I need to find one of these jobs were apparently incompetence is rewarded.

Geisha Williams presides over PG&E’s scorching of California

Geisha spent a whole two years on the job by the way, thank god she wasn’t a teacher, she would have tenure right now and you couldn’t get rid of her if you tried.

What is going to happen during bankruptcy? This is where things get very interesting, as I could see many different scenarios taking place. I think the most likely is a systematic parting out of the company over the course of several years while under state receivership. You could make an argument it should be broken up into a northern, coastal and inland utility. However I can see a big hang up, the infrastructure. A man in my office made a comment that the company owns quite a bit in valuable assets; this is somewhat true but mostly very false. True they own their headquarters in San Francisco, which is obviously worth quite a bit, but they are going to sell it to stave off creditors. As far as other assets, one mentioned by said man in my office was their wire line assets….really? I view those as a massive liability waiting to spark another fire. Ditto for their generators and transformer units, especially with their maintenance history as a company. Simply stated, buyer beware with these “assets” even if I got a sharp discount I wouldn’t touch them with a 100 foot insulated pole.

The aftermath with the bondholders could get very interesting though. CalPERS our state retirement system has not said how much in bonds they hold. Could the state bail them out just to keep CalPERS solvent? Could we see a state owned utility? Stay tuned! This is going to get messy.

Oh, the stock is down to around $6 a share, and don’t worry; they halted trading this morning, so you were unable to sell your shares, but retirement funds, institutional investors and those in the know were still able to bail out.

Happy trails PG&E, I hardly knew ya.

PG&E Has Failed…..What is Next?

Pacific Gas & Electric–also known as the “Firestarter” for causing too many fires this past decade–has announced that it intends to split off its natural gas division and/or file for bankruptcy protection.  This is a direct result of actions taken Thursday, January 3rd, by the largest insurance companies in the state; Allstate, State Farm General, and USAA filling suit to recover damages incurred by the Camp Fire. 

Insurers sue PG&E over damage caused by Camp Fire

PG&E following Toys R Us and Sears?

The Camp Fire for those of you who; live under a rock, vote democrat, or are related to a Park Brother, is the fire that burned all of Paradise and Magalia late last year.  The fire was started by a spark at a PG&E power generating facility, which had a myriad of maintenance issues by the way.  The utility could be on the hook for over $15 billion in damages from fires over the last two years alone, an amount that could well exceed the company’s total value.

Camp Fire, Paradise , CA 2018

How did we get here you may ask?  In short, California has a strange law (only 1 other state has it as well) called inverse liability.  This law applies to utilities in the state, basically saying, if there is any chance your power lines/equipment may have caused the fire, you are 100% liable for all the damage.  In the fires in Sonoma and Napa in 2017, as well as the Camp Fire in 2018, it appears PG&E will be liable for all damages under this law.  So, whether the cause was sparks from a generator in Concow this year, a tree falling on a transmission line in Napa, or a short in the line in Sonoma, PG&E is on the hook, not your insurance company.  Additionally, because this is set law, no judge will overturn this, or rule in the utility’s favor.

As a result of these liabilities, PG&E late Friday night began to look to implement “Project Falcon” named for the Peregrine Falcons that land on top of the San Francisco HQ’s roof.  Project Falcon includes selling off their prime real estate in San Francisco and relocating elsewhere in the Bay Area.  Maybe they should relocate somewhere less expensive…like I don’t know….ANYWHERE ELSE!  It includes finding additional board members and directors with a background in safety…..yeah probably should have done this after San Bruno, but ok.  In addition, they are looking to sell off/spin off their natural gas operations; i.e. the gas part of your bill. 

Is PG&E Dropping The ‘G’? Source Says The Utility Is Exploring Selling Off Natural Gas Division

This I have no opinion on, the entire company is ethically and morally bankrupt so I don’t know if two companies are better than one, but I digress.  Actually, they lobbied State Senator Bill Dodd (D-Soviet Berkeley) to pass legislation to absolve them of all liability from fire stemming from their electrical lines.  While Dodd may have been their puppet for a year, the bill went nowhere, and he has since reversed his stance calling PG&E one of the most corrupt companies he has ever dealt with.  I guess the check never cleared the bank?

This issue is actually very complex, and I see it two ways:

On one hand, PG&E like other utilities are a legalized monopoly governed by a state regulator who essentially tells them how much they can charge and how much they can make.  The other problem is their service territory is very large; they have over 5 million electricity customers in their territory.  In addition, most of their territory is rural, meaning they must bury their lines (very expensive) or have them on towers running through heavily wooded areas or rugged terrain. 

Electric Utility Service Area

For example, PG&E must somehow get power to the town of Biggs. Since this is part of their service area, they must run power lines there or have a generation plant for this community.  Let’s say that they run electrical transmission lines there and create a defensible space of call it 20 feet on both sides of the lines. In theory, that is all well and good, but along the route of the transmission lines are 100-foot-tall trees. When the trees fall or large branches break off and knockdown the lines, perhaps as the result of a storm or disease, not only could they disrupt power but might start a fire.  Since the transmission lines belong to PG&E, they own the resulting repair costs even if it was not directly their fault. While I do not feel sorry for them, the job is not very easy, especially when you are a monopoly and have no choice but to provide electrical and natural gas service.

On the other hand, I’m sorry; you are without a doubt the most ethically bankrupt company in the state, and by a wide margin.  When the San Bruno pipe blast occurred, your company never admitted or accepted blame, they passed it off and gave traditional corporate speak answers. 

San Bruno pipe blast

That pipe rupture and explosion killed people, and you were caught lying to a judge when they discovered the pipe was essentially “frankensteined” by welding together a bunch of scrap pieces. 

“frankensteined” pipe welds

You decided to save face by running a bunch of feel good ads on TV essentially saying you are working harder than ever to keep our communities safe….liars!  The fires in Sonoma, Napa and Paradise killed many people.  This is a direct result of a total lack of maintenance and integrity.  As much as I do not wish to see my gas provider go bankrupt or be split up/sold/etc. they need to be held accountable.  So far, they never have been.  I had to watch your annoying commercials then watch a town go up in flames because of your equipment and lack of accountability to your rate payers.  When it came time for maintenance or tree trimming, I’m sure you just had a single employee check it, initial a log and move on to the next site.  Rather than have a cross checker or someone to make sure the work was actually done, it was ignored, and people lost lives/homes and possessions as a result.  Shame on you.  You never learned your lesson, you just continue to repeat the same mistakes just hoping for a different outcome.

The Blog Father and I agree on several things involving this corporation.  First, it will be interesting to see how the bankruptcy proceedings handle what is likely a much-underfunded union pension plan for employees.  This state is very pro-union, and like most utilities, PG&E is very heavily unionized.  If the state swoops in and takes them over, do the union pensions get bailed out by the taxpayers?  Does the state bail the company out?  It will be fun to watch.  If the company splits, how does the gas company make it on its own?  Natural gas prices are literally at their lowest levels and it has been this way a long time.  Also, what happens to both companies?  Splitting up is an easy temporary solution but the problems will still exist.  Finally does the company even know what it actually owns or has infrastructure wise?  Some of these lines were laid decades and decades ago underground.  As a matter of fact, PG&E scoped the sewer lines in both our neighborhoods recently for some unknown reason.  As I stated earlier no one even knows what this company has infrastructure wise or the length of time it is guaranteed to work for. My suspicions are that huge portions of underground infrastructure in this state are decades past their useful life and in need of replacement.

Here is what needs to happen:
CEO Geisha Williams needs to be led out in handcuffs, she may not work in the field but she as CEO is the captain of the ship and sadly the ship has been taking on water for too long.  The failures happened under her watch.  Come out and admit your failures and shortcomings in the maintenance division.  Allow a judge to investigate the senior management including any supervisor in the areas where the issues occurred.  The Public Utility Commission (PUC) should be allowed nowhere near this, they have direct oversight of all CA utilities and have been asleep at the switch.  Talk directly to the ratepayers, PG&E’s electric rates are among the highest in the country, yet the upkeep has lacked badly.  In addition, please stop running your statewide propaganda commercials about how safe you are and how you are removing tree branches to keep us safe.  They are just that…propaganda. Thanks to your negligence, many people lost everything, some even paid with their own lives.  Oh, and take a look at what you have done to your stockholders this past year. In addition to a free-falling stock price, your bond rating was cut to junk, and you eliminated the dividend–a traditional hallmark of all utility stocks…good thing I was never an owner!

Geisha Williams presides over PG&E’s scorching of California

What is going to happen:
Xavier Becerra is going to take a break from suing Donald Trump and the feds for a minute to take up an investigation and sue PG&E.  I guess that’s a good thing because he won’t be wasting taxpayer dollars for a bit, but isn’t this too little too late?  I thought the job of government was supposed to be oversight?  Instead they just read and react, suing after the fact to get their pound of flesh.  Apparently, even your corporate record of supporting Liberal causes with large campaign contributions can’t buy you enough goodwill to get out of this mess. I’m still angry that you gave large sums of ratepayer money to fight against traditional marriage back when we were voting for Prop 8. Any linkage between electricity usage and what ratepayers do with their reproductive organs is beyond my comprehension, but then I don’t live in San Francisco.

Xavier Becerra

Becerra is talking about criminal charges against the corporation…how does that work?  Send the transformer to jail? Put the power lines on supervised probation?  Get it together!  Sadly, I forsee a government owned utility coming soon to every part of the state near you, that includes you Southern CA Edison customers, your utility is in only slightly better shape.  I offer up this evidence, PG&E wants to split into 2 companies as discussed above; gas and electric being separate.  This runs against the current trend of electric utilities buying gas utilities, also both companies have a record of serious neglect for safety of its customers.  The state knows this. They also know that PG&E has a very underfunded pension, and its bond credit rating has been cut to junk, essentially meaning the company faces insolvency very soon.  Enter the State of California, coming in hot with a bailout, keeping the union workers happy, just simply folding them into CALPers.  I’m sure the state looks at the electric rates charged by PG&E and salivates over being able to add that kind of coin to the general fund each month.  Gov. Newsome is on his way to state run healthcare, might as well make utilities the same way, this way they can make you install solar, and simply take it and not pay you. 

I think the answer lies somewhere in between these two scenarios.  I see the state essentially “parting out” PG&E. In the past (2005), SMUD put out a study and a ballot initiative to annex Davis and Woodland as mentioned above. PG&E spent big to defeat it. I think this plan could come back to fruition.  I could see the State selling off the territory to SMUD under an agreement that SMUD also take the surrounding rural areas and agree to a massive overhaul of the maintenance of existing infrastructure. 

I see this scenario playing out all over the state to be honest.  I don’t really see criminal charges, but I do see a major fine coming.  When you look at PG&E’s service territory you can also see a case to break up the company into about 3 – 4 smaller companies, similar to AT&T’s breakup.  Bottom line, this company needs to be gone ASAP and take all their employees with them. This has to be the most corrupt company in CA history.