Category: Economy

Remember those economically ignorant people that demanded a $15 an hour minimum wage and conducted a campaign of protests and walk-outs nationwide during the last few years?  Last year, California Legislators passed and Emperor Jerry Brown signed the bill into law here in Soviet California?  How about the issue coming up time and time again during the presidential election as Democrats tried to get this implemented nationwide?  This process has also played out in various municipalities and states across the nation.  California workers, congratulations on your wages increased, but before you go buy that brand new car or new iPhone you may want to take a look at how far automation has come in the last few years and how it will affect your job very soon.  Witness a conversation between X and the Blog Father about five months ago.

Over dinner at a Mexican food establishment with a salsa bar, the subject of automation was brought up.  The Blog Father shared that he was recently at a local Wendy’s and to his surprise the monitor used to order food was turned around, facing him.  Obviously something was wrong.  After further analysis, it turned out that Wendy’s had two touch screen monitors back-to-back, one facing the employee and another facing the customer. The Blog Father speculated that this was a small test being done by corporate to get customers used to the idea of entering their own order. This test was for limited time only.  To the Blog Father, the ordering process appeared intuitive. Clearly customers could order seamlessly and upselling was literally right at your fingertips; or for those of you in Rio Linda, asking about add-ons like bacon, fries, soda, baked potato (seriously? Are we in Russia?), and chili were just a touch away.

I imagine that the liberal counterargument to a more automated experience is that a machine can break down and isn’t unionized; thus The Party cannot receive union dues from the machine; however, the all-important sales tax still flows to government coffers.  However, I would argue automation has other benefits. It doesn’t need a vacation; call in sick because it was out too late the night before partying, doesn’t activate the fire suppression system due to prank phone calls, doesn’t have mandated medical insurance or payroll tax withholding, and is always ready to do what it’s told.

The employee and all his brethren protesting for $15 an hour minimum wage were right, the owners of fast food companies and other minimum wage jobs could never replace them, they were critical cogs in the process.  Initially they might have been right; the monitors were turned back to their original position of advertising products after a trial time.  Yup the $15 an hour folks were the smartest people in the room….until the executives realized they weren’t needed in the room, and could be replaced cheaply.

The people thinking they would be the economic beneficiaries of a minimum wage increase were wrong; Wendy’s has announced a roll out of automated kiosks nationwide, eliminating at least 1,000 jobs across the country.
Link: Wendy’s deploys kiosks at 1,000 stores
The Elk Grove location is being renovated and modernized as we speak.  I fully expect that once it re-opens for business, this Wendy’s will be equipped with technology that replaces employees with automation.

A second example; Outback steakhouse—a favorite of X and Mrs. X—now has those annoying kiosk things at every table, and wait staff pushing guests to use them to order more drinks, check out, etc.  Keep in mind, I was there to eat a steak on Valentine’s Day and had to look at a tablet asking me if I wanted to buy a new alcoholic beverage every five minutes!  I mentioned to my waitress I thought it was a little over the top, her response shocked me; she said “corporate wants 70% usage of this kiosk at every location by the end of 2017!”  Yes, hard to believe but machines will be replacing the American worker.

Readers of this blog smarter than the average CRA member understand that machines—not illegals—are replacing the American worker.  This comes as no surprise to either the Blog Father or X, as corporations and especially franchisees—whom most fast food workers really work for—will do everything possible to save a few dollars.  Now, that this reaction to the wage increase is happening, scores of low skilled workers will be replaced, likely on a permanent basis.  This has been the Democrats goal since the party’s birth; create a permanent welfare/government dependent class!

Before you overreact, think about it, how many fast food employees would you say are worth $15 an hour?  (Don’t forget to add the health insurance cost of each worker mandated by Arnoldcare, paid family leave, and all the other employer mandated taxes that employers must pay.)

Ok, now let’s play devil’s advocate:
• How much are you willing to see the dollar menu increase by at McDonalds to pay the employee $15 minimum wage?
• How about the two medium two topping pizza’s for $7.99 a piece at Dominos?
• Like the 4 for $5 at Wendy’s?  Say Hello to 4 for $10, not such a great deal right?
• Applebee’s burger, fries and coke for $9.99, how about $19.99?
Okay by now I figure you get my point, but if you are a CRA member, Ted Cruz for President 2020 member, or Aaron or George Park, please stop reading as you are lost.

My point is very simple, minimum wage jobs are not intended to be career wages; they are a starting point for entry level work.  By raising the minimum wage and making it seem more like a career choice, employment is going to be harder and harder to come by for younger and unskilled Americans.  Sadly, these unskilled or inexperienced folks think the Democrats are trying to lobby for higher wages to help them and thus gladly give them their votes but in reality the joke is on them. They are literally voting themselves out of a job and into a life of subjugation and dependence on government.  Look no further than the Wendy’s in Elk Grove, maybe I will be wrong, I hope I am, but I have a feeling that when it reopens after renovation, Wendy’s will be employing kiosks not people at the front counter.

Until next time,

X

We files our taxes last week, so just for fun I checked on my refund status tonight.

The IRS is promising to give me my refund 8 days after I filed.

However, the State of California is a different story. They promised me a refund within 2 months if I filed electronically and four months if I filed a paper return.

In previous years, my fastest turnaround for a refund from the Franchise Tax Board (FTB) was seven days. Apparently Democrats screw-up everything they touch. Now that they run everything in the State its two months? Too bad there aren’t any tech companies on the West Coast. I guess they can’t write a decent program when Trump has all their brainy people stuck at home or in some backwater airport waiting for permission to travel to the United States.

Based on the timeframe required to process my return, it looks like the State is in worse financial shape than they admit publicly. For paper returns you will literally be waiting until next fiscal year to get your money back.

If you wish to check on your refund, here are the links.

IRS
Link: Federal Tax Refund status

FTB
Link: FTB California Refund Status

Update: 02-13-2017 Contrary to the statement on their website, Franchise Tax Board did in fact process my return. Actual turn around was less than two weeks. Apparently their time estimates are made by Mr. Scott to maintain the appearance of a miracle worker.

Warren Buffett owns lots of companies through his investment vehicle subsidiary Berkshire Hathaway.  X will give Buffett credit, he does give out very good investment advice such as; taking a long view on the market as opposed to trying to time it, and buying a wonderful company at a good price instead of buying a good company at a wonderful price.  Turn on CNBC or Fox Business and the program’s host will probably mention Buffett several times throughout the day. He is known as both the “oracle of Omaha” and the “greatest investor ever.”  For the most part this is true; however, let’s delve into a few select companies he owns and how they fleece the poorest people living in our country.

One such company is Clayton Homes. Berkshire Hathaway (Buffett) acquired them back in 2003 for 1.7 billion dollars.  Clayton Homes builds and sells manufactured homes. X has no issue and actually believes Buffett made a smart decision to buy a company like Clayton.  Manufactured homes are generally lived in by people who do not have much financially and that is not an issue; people do need to live somewhere.  Clayton sells its products on sales lots similar to an independent car dealer. Typically, when customers visit Clayton’s lots, they encounter flashy signs and banners specifically to target their preferred demographic, the poor, and minorities. (More on this later).

Clayton was expanded over the years to produce many varieties of the same types of homes under different names, smart move as automakers do the same thing.  Many towns have multiple Clayton Homes dealers but they were intentionally branded under different names to deceive shoppers.  In some sparsely populated parts of the Midwest and South, one would have to drive past as many as five Clayton Homes dealers to find a non-Clayton dealer.  In Texas, there are 12 Clayton dealers and not one competitor for over three hours away!  In Carrolton, Texas—just north of Dallas, Buffet’s Clayton Homes controls 90% of the manufactured home market, yeah think about that for a minute.

Manufactured home selling isn’t unethical or anything so, why is X white hot at Rich Uncle Pennybags?  It’s the way he markets, insures, and finances them.  Clayton markets directly to the poor, but more so to minorities. One former Clayton supervisor said “We market to that demographic because they are not as smart as whites and don’t ask questions like whites do.”  That’s not racist at all is it?  Manufactured homes are a horrible investment to begin with because they depreciate in value extremely quickly, and if you don’t have the $45k to buy the unit outright then Buffett can finance it for you!  Yup, he owns Vanderbilt Mortgage, a low income, high risk lender.  Vanderbilt was the preferred lender for Clayton sales associates to steer their unexpected customers toward at financing time.  Vanderbilt paid Clayton a royalty for each placed loan, and Buffett got a cut as well. (Kinda sounds like the Wells Fargo debacle right?)  Vanderbilt charges very high fees, and the interest rates are exorbitant, often seven points higher than a typical home loan.  So in today’s terms that would be around 11% interest a year.  Other lenders charged around 3.8% higher than a conventional home loan, but remember Uncle Warren wants to get paid at every point of the process.  Vanderbilt Mortgage has a staggering 40% of the manufactured home loan market, the second largest controls just 6%, that would be Wells Fargo.

Additionally Clayton has an insurance subsidiary, HomeFirst Agency. They were the preferred provider of insurance on all the homes sold by Clayton and financed by Vanderbilt.  Again, the sales associates were telling customers that their current insurance company does not insure mobile homes so you should go with our in house option.  So once again he duped unsuspecting people.  So at this point of the sales process Buffett has profited several different times: the loan Clayton got from Berkshire to build the unit, Shaw Carpet and Benjamin Moore Paints to finish the interior (both owned by Buffett), the loan through Vanderbilt Mortgage, and the insurance through HomeFirst.  Sounds like a heck of a gig if you can land it.  However of the three main players in this article, Vanderbilt Mortgage literally may be the devil re-incarnated.

Vanderbilt doesn’t verify or ask for income statements from the individual getting the loan.  This happened on purpose folks, Vanderbilt does this to make a profit up front on the fees and interest for the first few months, then they could repossess the unit and sell it again; lather, rinse, repeat.  Or in the words of the Blogfather, Dewey, Screwem and Howe.  Vanderbilt would tell the customers the loans could be refinanced at a lower rate in the future; not true, Vanderbilt did this so they could repossess.  Vanderbilt customer service members would tell clients that called in pleading to refinance that they should and I quote “not buy medication or medicines, and encourage them to pawn off or sell any items they could to make that payment.”  The customers could not refinance the loans as units depreciate extremely quickly. As a result, many customers lost their homes.  Even worse, many customers lost their land which they had put up as collateral.  In one case, while foreclosure was being introduced, Vanderbilt had already taken the unit and had it listed for sale on a Clayton lot again.  These companies are so corrupt and unethical they defied the orders of a judge.

So once again to recap, the nice guy Warren Buffett who laments that his secretary pays a higher income tax rate then he does, owns companies that allow him to profit at every turn and plays by his own set of rules when it comes to steering customers into making poor financial decisions.  Buffett is a fraud, plain and simple. He is a very greedy human being who is ruthless to the working people while he profits hand over fist.  He should not be regarded as a great person or great investor, as in these cases with Vanderbilt Mortgage and Clayton Homes some people and families literally lost everything to a phony empire know as Warren Buffett.  Wait until I unveil the next hit on him, regarding his profits over employee’s dealings.

Until next time,

X

As we begin part 2 of our series detailing the fraud known as “the greatest investor in the world,” we want to open with a developing story out of Omaha this week.  Warren Buffet was asked to comment about the Wells Fargo banking fraud scandal; remember the company he owns about 10% of? Well Ole Warren belched out a doozy; he is not going to comment on the matter until November.  That’s interesting, that also happens to be after the election for President and congress will be decided.  Great leadership, I would love to work for him, be directly involved in fraud and not have to suffer any consequences.  Maybe if Hillary wins the election she will put him in charge of the Department of Justice?  One could argue he would actually be better than either of the two that served as head of the DOJ under President Obama.

Maybe Buffett will care to comment on this scandal emulating from his subsidiary Berkshire Hathaway Applied Underwriters.  A bicycle courier company is suing the snake from Omaha’s company after being duped by their workers compensation so called insurance policy bought through Berkshire Hathaway.  The company—Breakaway Courier Company—that is suing Buffett calls the policy they bought a reverse Ponzi-scheme.  Insurance—as most people know—is paid by an individual or corporation to minimize or transfer risk.  Workers compensation insurance carries very steep premiums as a result of worker misclassification and fraud that occurs regularly.  In this case, Breakaway Courier paid in over $863,000 in premiums over the years and they were promised by Buffett’s conglomerate that the premium was being placed in a “cell” which means they would get the money back if not used to pay claims.  So in essence, companies were covering each other’s losses, and Breakaway found out the money was not going to be returned as promised.

Here is an excerpt from Bloomberg Markets;

In the lawsuit, Breakaway Courier Corp. accused Omaha, Nebraska-based Berkshire of creating what it called a “reverse Ponzi scheme” that requires workers’ compensation customers to cover each other’s losses. According to the complaint in state court in New York, companies are led to believe their premiums are being paid into “protected cells” and will eventually be returned to them.

“Instead, Berkshire Hathaway illegally siphons off premiums,” leaving “employers and injured workers without the funds that New York State requires to be available to cover losses,” according to the complaint.

Oh it gets much better folks, the Department of Insurance in; Wisconsin, California, and Vermont have banned further sale of these policies saying they duped the companies that bought them.  It’s worse, in California you are required to get approval for all insurance premium rates by the commissioner, but apparently not Buffett, he is too big to fail.

“California’s insurance commissioner ruled against Berkshire in June over workers’ compensation policies after determining that the company duped a small business, Shasta Linen Supply, and circumvented a review of rates. Earlier this month, the company agreed to stop selling the policies in dispute in California. The regulator said the Berkshire businesses charged customers’ rates which hadn’t been approved by the regulator.”

No surprise here either, when asked to comment about this small matter of being honest, Buffett had no comment.  Hopefully Hillary will bail him out and make all this go away?  This scheme actually runs through multiple shell companies set up by Buffett so he could pocket money during each transaction and buy stock in companies like Wells Fargo.  Typically, Buffett wants to profit at every point of the transaction, not just the final product.  Pretty awesome job ripping off a small business of 63 based in Sacramento ole Warren. Is this the type of thing you and Charlie Munger speak about during your annual meeting?

X has the 3rd installment ready to go as well, once again targeting subsidiaries of Buffett; Clayton Homes and Vanderbilt Mortgage.  Get in the underground bunker Buffett fans, the A-bomb is about to drop.

Til next week “X”

The headline says it all
Wells Fargo Customers May Never See Their Day in Court, Experts Say
Link: NBC Business

The reason is simple; Wells Fargo employed the law firm of Dewey, Screwum, and Howe. These slick guys inserted a mandatory arbitration clause deep in the bowels of the bank’s fine print and weasel words so in order to open an account with the stagecoach bank you agree to “…mandatory arbitration contract clauses that protect banks from class-action suits.”

The short version is as a bank customer,” you have the right to remain silent…” because by opening an account you waive all your rights to legal protection.

Oh, lest you think this unique, go read your Internet service agreement or other consumer contracts. The software I’m using to write this blog is not mine even though hundreds of dollars were paid to acquire it. I don’t own the software, just a license to use it. It still belongs to Microsoft.

Like home ownership, much that you pay good money for is not really yours; you just use it at the pleasure of the King and his agents.

Loyal readers, as I am sure you have heard by now, the largest bank in the United States—by market value, Wells Fargo—just paid out a record $185 million dollars in both fines and penalties deriving from opening fraudulent accounts for their “customers.”

A common misconception about the banking industry is that you go to a teller window to open a new account or product at said bank.  Tellers do not have the ability or access to your Sensitive Personal Information (SPI) only personal bankers (the people that work in cubicles they refer to as offices) have access.  SPI is a term very common in the financial service industry.  SPI refers to a customer or potential customer’s date of birth, driver’s license number, social security number, and wife’s maiden name, etc.  We refer to this as sensitive because this information is what makes you unique in our country and these numbers are supposed to be kept confidential.  I will lay out in this installment how the fraud went down, and an executive getting a large “golden parachute.”

The banking industry is notoriously low paying. Tellers usually start around $11 or so dollars an hour. Their only path to promotion is to become a personal banker. Once established at this level they might eventually venture off into mortgages, retirement accounts, insurance etc.  Personal bankers may make around $14 an hour but usually get generous bonuses based on “multi-lining” or “upselling” as some call it.

X has had this happen to him before. I opened a checking account at Bank of America, and ended up leaving with said checking account as well as a savings account; nice job by the banker, likely netting him a fair bonus.

This is not what happened at Wells Fargo. You see, at Wells Fargo the bankers are put on strict quotas, and failure to hit “the numbers” each quarter results in no bonus, additional training and sometimes termination.  Enter the fraudsters, every time a bonus exists people will naturally find a way to game the system.  You would think only a small group of rogue employee’s right – say 10-15 companywide?  Maybe a few more give or take?  Try 5,300 folks, over a span of about five years!  This is serial fraud, and should have ended up with a US attorney starting a federal investigation.

These “employees” (and I use that term very loosely) would open an account for a customer legitimately, then unbeknownst to the customer open several other accounts and even credit cards!  Yes, that meant filling out and likely forging a signature for someone on a credit application.  Even more appalling is the fraudsters changed the mailing address to various PO boxes so the customers never had any idea this fraud was going down.  To make the whole situation that much more bizarre the customers were even charged fees associated with these accounts.  Talk about arrogance, and extreme double dipping.

This type of fraud likely came from an intra company memo. I find it hard to believe 5,500 employees could all be on the same page as far as running a fraud scheme like this.  These orders came from the top, more specifically the C-suite. I think the world’s most famous and well known investor was involved personally.  Yes folks I am talking about the snake from Omaha, Warren Buffett.  You see Buffet makes money based on how big his conglomerate (or as I call the USA’s first legal monopoly) does on investments, insurance and dividends from the companies he owns.  Buffett—through Berkshire Hathaway—owns almost 7% of Wells Fargo Common Stock shares, or a measly 320 million shares of stock.  Wells Fargo also pays a dividend and has been growing its disbursements over the years since the housing crash.  Wells Fargo like most financial institutions reports earnings but also puts an emphasis on new accounts opened during the quarter.  This is where the scam comes full circle, Buffett wants good earnings so his portfolio grows in value, the company wants more new accounts, and executives and employees get bonuses.

So you tell me, you think only a few rogue employees were in on this fraud scheme?  Well we know a vice president was canned over it; Carrie Tolstedt was terminated last week; however,  for her expertise in running fraud schemes, she netted $125 million dollars in severance pay.  Warren Buffett was behind or knew all about this.

X is writing a three part series and is going to continue to expose the serial fraud that the snake from Omaha is behind.  Once you read what I have uncovered about this guy, it will likely change your mind. Warren Buffett—through his conglomerate—is a very horrible human being. Like the Robber Barons of old, he enriches his family and friends while screwing the common working man.  All of this will be laid out in an in depth report likely worthy of a Pulitzer Prize—if only they were given to people with Conservative views.

Back to a serious note, what happened at Wells Fargo is extremely upsetting.  An executive got rewarded, employees got paid bonuses for engaging in fraudulent activity, Buffett made millions, and common people got nothing except the privilege to pay bogus fees and fines to the bank.  After the fraud was detected; Wells Fargo was fined a hefty sum, the federal government got their pound of flesh, the City and County of Los Angeles got their pound of flesh, but what did the common person who was a victim get?  Oh that’s right a whole lotta nothing.

The Consumer Finance Protection Bureau was created to stop this kind of behavior, but nothing happened.  When they were needed they were impotent to do their job.  So what about the consumer?

Now eventually a class action lawsuit against Wells Fargo will happen and customers who were affected by this fraud will likely get a $10 rebate back for each $50 fee they were forced to pay, not exactly justice.  Again, the lawyers will get more than the victims. But hey everyone important got paid in this scheme so maybe we just let it pass, right?  Besides, Wells Fargo is too big to fail, or so we were told. Good Lord

Until next time,

X

As happens about every two years, the drain in the kitchen sink is plugged-up. As a result, cooking and washing dishes is all but impossible at the moment. The plumber can’t be here until tomorrow.

Please note that this is a good thing. If you need a guy to do work on your house and he can start immediately you should not employ them. Those with skills are in demand and those without are anxious to start now. Hiring second tier people in construction trades usually ends badly. They have your money and you have a partially completed project.

Since the kitchen is out of order, Mrs. ReallyRight said, I don’t want to cook so let’s go out. I agreed and suggested Chick-fil-A. Four of us trekked over to our local Chick-fil-A.

Here was our dine-in order:
• Chick-fil-A Sandwich
• Deluxe Chick-fil-A Sandwich
• Harvest Kale Salad
• Spicy Southwestern Salad
• Three large waffle fries
• Large Diet Coke
• Large Sprite
• Large Dr. Pepper
• Medium Diet Lemonade

Total Price $0.97

Yeah ninety-seven cents.

Every few months we get a cheap date by “going to see the cow”.

So how did I do it? Simple
• Three Calendar cards –this month is free large waffle fries and large drink
• Two Chick-fil-A customer surveys—each good for free entrée
• One free entrée card due to slow service on a previous visit
• Plus $1.29 remaining on my McAfee rebate card

This company rewards their regular customers and I’m glad they can help a family on a budget.

I recently got a new bank card because my bank said I had purchased something from a store that had a security breach. In this case I think it was Wendy’s. I was told that the card I was using would stop working on August 25th and needed to activate the new card before then. So I dutifully activated the new card on August 24th.  The new card had a different account number and expiration date than my previous card.

On Labor Day morning (September 5th ), my wife comes into the bedroom saying the bank is calling with a fraud alert. Every few months I get a call like this because my purchasing habits go outside their normal parameters but I did nothing that would trigger such a call. I went on the Internet and sure enough several fraudulent charges had been made using my brand new bank card.

The second attempt at Rite Aid is likely what triggered the fraud alert.

Being that Labor Day is a bank holiday, all I could do was cancel my bank card. I had to wait until the next day to dispute the charges.

After the payments posted on the first three transactions, the declined withdrawal dropped-off the bank record and only the pending Walmart.com remained. The transaction said it would not post until September 7th. (I could only dispute the charges that successfully removed money from my account and not the pending Walmart charge.)

On September 6th, I contacted Walmart and my bank, hoping to thwart the last remaining transaction by these thieves. Even with the date, approximate time of the fraudulent purchase, and confirmation number of the purchase, neither was able (or willing) to help me.

Walmart said that without the actual order number that they could not stop the transaction. My bank said that they not only couldn’t block it but they couldn’t even tell me how much the final transaction would be until it posted. The lady at the bank couldn’t even see the pending charge until I pulled up my account on my cell phone and showed it to her.

Furthermore, they told me not to take money out of my account because they couldn’t promise me that any of my pending transactions would go thru if I did that. In short, I was told to take it in the shorts and just let the fraudulent charge happen and then I would get the money reimbursed from the bank in about ten days.

Being that my mortgage payment and other large transactions had not yet cleared the bank, this charge at Walmart.com could have been very substantial and depleted my bank account to the point that everything would bounce anyways. Faced with this nightmare scenario, what would you do?

The more I thought about it, the more violated I felt. As often happens in our country, you are first violated by the criminal and then a second time by the system.

I left the minimum amount necessary to cover all the outstanding checks that I had already mailed in my account and transferred the rest of the money to my wife’s account. Early this morning, I awakened to find that all pending transactions except Walmart had posted. At that point, I further reduced my bank balance to $75. When I got up to go to work, I decided I needed to transfer an additional $200 to my checking account. My bank separately posted one check later in the morning. They did ding me for a fee to cover the check but as of this writing, Walmart has dropped off my account.

I’m hoping that the worst is behind me now. It appears that the Walmart purchase was aborted; probably overnight. If the thieves had spent a small sum on my card, the transaction likely would have gone thru but I have the feeling that they “went for broke” or more literally tried to make me broke.

Of interest to me is the fact that two of the fraudulent orders that they charged to my account were intended for delivery at a physical address. The food order and Walmart order both had to go somewhere. A reasonable person would think this would make it easier to catch these guys but neither my bank nor Walmart indicated that law enforcement be notified of the fraud.

It reminds me of the time we got robbed and the policeman asked if we had insurance and as soon as we said yes, they were done looking for the crooks.

It really bothers me that such fraud is tolerated and so commonplace that nobody even seems interested in pursuing the thieves. For my bank, it is just an allocation in their general ledger and a cost for doing business.

My final thought on this is that God is watching and our family has asked Him to mete out a little justice now on these thieves and not let it wait until the next life. And yes I do believe that divine intervention prevented this from being as harmful to us as it could have been.