Prelude to Economic Disaster: Billionaire Liquidates All Real Estate Ahead of Crash

economy-rip

If you were to contact a real estate agent in any major market today they’d likely advise you the market is so “hot” that if you intend on purchasing property you’d better be prepared to act fast. They’ll adamantly point out, contrary to reality, that the housing market has recovered, available inventory is dropping, prices are rising, and they can only go higher from here.

But if you’re paying attention to what’s happening around us, and not just with our own economy here in the United States, then you’d likely have noticed that while many Americans are flying high on hopes of change and recovery, there is an economic disaster of unprecedented scale in the making.

First, we know that the third largest economy in the world, China, is going through a massive credit crunch as bad loans there have soared to near all time highs, meaning that loans are quickly becoming non-existent and credit markets are now frozen. This means that no one is going to be building ghost cities and empty malls in the Peoples’ Republic again any time soon. Moreover, it means no more easy cash. We know what happened in the United States and the rest of the world when the last credit crunch hit.

Second, as Sovereign Man points out, the richest man in Asia Li Ka-Shing (their version of Warren Buffet or Bill Gates with a reported net worth of $ 30 billion) has rapidly liquidated his real estate holdings and is existing the market as quickly as possible.

Here’s a guy you want to bet on– Li Ka-Shing.

Li is reportedly the richest person in Asia with a net worth well in excess of $ 30 billion, much of which he made being a shrewd property investor.

Li Ka-Shing was investing in mainland China back in the early 90s, way back before it became the trendy thing to do. Now, Li wants out of China. All of it.

Since August of last year, he’s dumped billions of dollars worth of his Chinese holdings. The latest is the $ 928 million sale of the Pacific Place shopping center in Beijing– this deal was inked just days ago.

Once the deal concludes, Li will no longer have any major property investments in mainland China.

This isn’t a person who became wealthy by being flippant and scared. So what does he see that nobody else seems to be paying much attention to?

Simple. China’s credit crunch.

But Li Ka-Shing isn’t the only one bailing. Luxury real estate investors are unloading their real estate assets as well in an effort to raise cash and not be the last one holding a dead asset. For all intents and purposes, the music in China has stopped:

Cash-strapped Chinese are scrambling to sell their luxury homes in Hong Kong, and some are knocking up to a fifth off the price for a quick sale, as a liquidity crunch looms on the mainland.

On the domestic front we’ve seen stock markets drop a fairly significant level in recent weeks. So much so that company’s hoping to launch new IPO initiatives have chosen to just sit this one out as they are worried that investors are running out of money to help fund their operations.

You wouldn’t know that, of course, because mainstream media pundits like Dennis Kneale continue to sell Americans on the notion that we’re in a robust recovery:

Yet the economy, both locally and globally, is in vastly better shape than it was when we took that terrible tumble, down to Dow 6,800 in March 2009.

Americans have cut back on debt, and so have companies.

Karl Denninger of the Market Ticker calls this one what it is – a complete lie – and points out that we are nowhere near cutting back on our debt.

I Despise Liars

US debt to present

“Cut back”?  Really?  Worse, ex mortgages this is not true at any level; there is $ 3,733.5 billion in non-mortgage consumer debt outstanding.  That is an all-time high; in Q4/2006 (just before the crash, remember?) that stood at $ 3,047.2 billion or nearly $ 700 billion less.

An awful lot of that increase since 2007, incidentally, is student loans — exactly where it cannot be for sustainable economic progress since the younger generation has to eventually take the reins from us older folks.  This is nothing more than an economic Ponzi scheme with its cheering section led by people like Dennis who refuse to look at and argue from facts.

As for corporate debt it never decreased at all.

Something is amiss, and the fact that no one in the mainstream, which is where tens of millions of Americans get their “facts,” is really talking about it should be a blaring alarm.

There are, however, some Americans paying attention. As in China, it’s the billionaires and elite who have direct access to the puppeteers pulling the strings, and like Li Ka-shing, they have been quietly and rapidly dumping millions of shares of stock:

Despite the 6.5% stock market rally over the last three months, a handful ofbillionaires are quietly dumping their American stocks . . . and fast.

In the latest filing for Buffett’s holding company Berkshire Hathaway, Buffett has been drastically reducing his exposure to stocks that depend on consumer purchasing habits. Berkshire sold roughly 19 million shares of Johnson & Johnson, and reduced his overall stake in “consumer product stocks” by 21%. Berkshire Hathaway also sold its entire stake in California-based computer parts supplier Intel.

Fellow billionaire John Paulson, who made a fortune betting on the subprime mortgage meltdown, is clearing out of U.S. stocks too. During the second quarter of the year, Paulson’s hedge fund, Paulson & Co., dumped 14 million shares of JPMorgan Chase. The fund also dumped its entire position in discount retailer Family Dollar and consumer-goods maker Sara Lee.

Finally, billionaire George Soros recently sold nearly all of his bank stocks, including shares of JPMorgan Chase, Citigroup, and Goldman Sachs. Between the three banks, Soros sold more than a million shares.

The big money, often referred to as the smart money, is getting out of the game and they are dumping these assets on unsuspecting investors.

They know, for example, that earnings growth has now plunged to its lowest levels since 2012.

As these in-the-know elites unload their positions, average investors depending on their financial advisers to tell them the truth are slamming money into these stocks and paying, in some cases, 500 times earnings. Real estate investors are, likewise, overpaying for homes based on the idea that markets are “hotter” than they’ve been in years.

It’s a recipe for disaster and it won’t end well – at least for 99% of people who blindly believe the opinions of their favorite “experts.”

economy-rip---tumb


SHTF Plan – When It Hits The Fan, Don’t Say We Didn’t Warn You

Leaflets ordering Jews to register in east Ukraine city or be deported creating fear. Threat evocative of 1930s. Pro-Russian separatists say order isn’t real. But someone is trying to scare Ukrainian Jews. The question is: Who?

ukraine-mapUPDATED: (Washington, D.C.) — There is a deeply disturbing article in the USA Today that I encourage you to read and share with others. It reports that leaflets are being spread throughout the eastern Ukrainian city of Donetsk saying that government officials controlled by pro-Russian forces are ordering Jews to register with local authorities and pay a fee, or they could be deported and their assets could be confiscated.

Secretary of State John Kerry today called such actions “intolerable” and “grotesque.” But pro-Russian separatists flatly deny the allegations that they have been distributing leaflets requiring Jews to register. 

The leaflets exist. They’ve been spread all over the city of Donetsk. They’re even printed on official government stationary and they bear the signature of the mayor. But the mayor says he didn’t write it. So who did? Are they a hoax, or official policy?

One thing is clear: someone is targeting the Jewish people of Ukraine, trying to instill fear in them, and trying to get them to leave the country.

The threat left many of the 15,000 Jews of Donetsk ‘shocked and hysterical,’ the chief rabbi of the city told The Daily Beast in an interview on Thursday,” reports the Daily Beast. “He pointed out where one of the leaflets had been left on a tree outside his synagogue on Oktiabskaya Street. In all of his 20-year service in Donetsk, Rabbi Pinhas Vyshedski said, he could never imagine that anything as ‘cynical’ and ‘anti-human’ could ever happen to his community.”

Here’s the latest:

That said, given the long history of virulent anti-Semitism in the region, there is reason to be concerned for the safety of the roughly 200,000 Jewish people in Ukraine.

Consider recent headlines:

As I write about in The Auschwitz Escape, Adolf Hitler made similar legal moves against the Jewish people in the early 1930s, separating them out from the rest of the population. We know where it led — the Final Solution and the gas chambers a few years later. We cannot yet say where the leaders of Donetsk are going with this, but clearly such moves bode ill.

Please pray for the Jewish people in Crimea and throughout Ukraine, for safety and protection and for the Lord to truly bless them amidst this crisis and beyond.

Please also pray for Israeli leaders and other Jewish leaders as they determine how to respond to these developments, should they prove to be true. Is it possible that soon Israel will have to begin airlifting Jews out of Ukraine? If that happens, the Christian community must stand with the Jewish people and help in every way.

Here’s one of the key news reports that set off the international furor:

Jews ordered to register in east Ukraine

By Oren Dorrell, USA Today, April 17, 2014

Jews in the eastern Ukrainian city of Donetsk where pro-Russian militants have taken over government buildings were told they have to “register” with the Ukrainians who are trying to make the city become part of Russia, according to Israeli media.

Jews emerging from a synagogue say they were handed leaflets that ordered the city’s Jews to provide a list of property they own and pay a registration fee “or else have their citizenship revoked, face deportation and see their assets confiscated,” reported Ynet News, Israel’s largest news website.

Donetsk is the site of an “anti-terrorist” operation by the Ukraine government, which has moved military columns into the region to force out militants who are demanding a referendum be held on joining Russia.

The leaflets bore the name of Denis Pushilin, who identified himself as chairman of “Donetsk’s temporary government,” and were distributed near the Donetsk synagogue and other areas, according to the report.

Pushilin acknowledged the flyers were distributed by his organization but he disavowed their content, according to the web site Jews of Kiev, Ynet reported.

Emanuel Shechter, in Israel, told Ynet his friends in Donetsk sent him a copy of the leaflet through social media.

“They told me that masked men were waiting for Jewish people after the Passover eve prayer, handed them the flyer and told them to obey its instructions,” he said.

The leaflet begins, “Dear Ukraine citizens of Jewish nationality,” and states that all people of Jewish descent over 16 years old must report to the Commissioner for Nationalities in the Donetsk Regional Administration building and “register.”

It says the reason is because the leaders of the Jewish community of Ukraine supported Bendery Junta, a reference to Stepan Bandera, the leader of the Ukrainian nationalist movement that fought for Ukrainian independence at the end of World War II, “and oppose the pro-Slavic People’s Republic of Donetsk,” a name adopted by the militant leadership.

The leaflet then described which documents Jews should provide: “ID and passport are required to register your Jewish religion, religious documents of family members, as well as documents establishing the rights to all real estate property that belongs to you, including vehicles.”

Consequences for non-compliance will result in citizenship bein g revoked “and you will be forced outside the country with a confiscation of property.” A registration fee of $ 50 would be required, it said.

Olga Reznikova, 32, a Jewish resident of Donetsk, told Ynet she never experienced anti-Semitism in the city until she saw this leaflet.

“We don’t know if these notifications were distributed by pro-Russian activists or someone else, but it’s serious that it exists,” she said. “The text reminds of the fascists in 1941,” she said referring to the Nazis who occupied Ukraine during World War II.

Michael Salberg, director of the international affairs at the New York City-based Anti-Defamation League, said it’s unclear if the leaflets were issued by the pro-Russian leadership or a splinter group operating within the pro-Russian camp.

But the Russian side has used the sceptre of anti-Semitism in a cynical manner since anti-government protests began in Kiev that resulted in the ousting of Ukraine’s pro-Russian former president Viktor Yanukovych. Russia and its allies in Ukraine issued multiple stories about the the threat posed to Jews by Ukraine’s new pro-Western government in Kiev, Salberg said.

Those stories were based in part on ultra-nationalists who joined the Maidan protests, and the inclusion of the ultra-nationalist Svoboda party in Ukraine’s new interim government. But the threat turned out to be false, he said.

Svoboda’s leadership needs to be monitored, but so far it has refrained from anti-Semitic statements since joining the government, he said. And the prevalence of anti-Semitic acts has not changed since before the Maidan protests, according to the ADL and the Ukrainian Helsinki Human Rights Union, which monitors human rights in Ukraine.

Distributing such leaflets is a recruitment tool to appeal to the xenophobic fears of the majority, to enlist them to your cause and focus on a common enemy, the Jews,” Salberg said.

And by targeting Donetsk’s Jews, they also send a message to all the region’s residents, Salberg said.

“The message is a message to all the people that is we’re going to exert our power over you,” he said. “Jews are the default scapegoat throughout history for despots to send a message to the general public: Don’t step out of line.”

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Joel C. Rosenberg’s Blog

Real Self Reliance: A Model for Profitable Micro-Farming (On Just 1.5 Acres)

Editor’s Note: One of the key tenets of living a sustainable lifestyle is the ability to produce one’s own food. Traditionally, accomplishing such a goal required would-be farmers or ranchers to first find land, come up with a ton of start-up money, and then move the entire family out to rural America. But what if there were a way that you could produce enough food for yourself, while also feeding up to 200 families without the typical start up requirements for farming? In the following interview with Adam Taggert of Peak Prosperity and The Market Gardener author Jean-Martin Fortier, you can learn just how to do it yourself. Moreover, not only will you be well on your way towards self reliance, but you can turn it into a profitable business while you’re at it. Jean-Martin Fornier did and he did it using just 1.5 acres – an incredible feat considering most farms requires acres upon acres of land to be successful. Don’t miss this one – it could well change your life (and if enough individuals and families start their own micro-farms, it could even change how our entire society works from top to bottom).


micro-farm-modelAs we awaken to the realities in store for us in a future defined by declining net energy, concerns about food security, adequate nutrition, community resilience, and reliable income commonly arise.

Small-scale farming usually quickly surfaces as a pursuit that could help address all of these. Yet most dismiss the idea of becoming farmers themselves; mainly because of lack of prior experience, coupled with lack of capital. It simply feels too risky.

The refrain we most frequently hear is: I think I’d love doing it, but I don’t know how I’d make a living.

Enter Jean-Martin Fortier and his wife, Maude-Hélène. They are a thirtysomething couple who have been farming successfully for the past decade. In fact, they’ve been micro-farming: their entire growing operations happen on just an acre and half of land.

And with this small plot, they feed over 200 families. And do so profitably.

The Fortiers are pioneers of the type of new models we’re in such need of for the coming future. Fortunately, they realize this, and are being as transparent about their operations as they can — in order to educate, encourage and inspire people to join the emerging new generation of small-scale farmers.

They have published a book, The Market Gardener, which is nothing short of an operating manual for their entire business. In it, they reveal exactly what they grow, how they grow it, what tools and farming practices they use, who their customers are, what they charge them, and how much profit they take home at the end of the day.

A quick summary of the numbers from their 1.5 acre operation:

  • 2013 revenue: $ 140,000
  • Customer sales breakdown:
    • CSA operations (140 members): 60%
    • Farmer’s markets (2): 30%
    • Restaurants/grocery stores: 10%
  • Staff: 2 paid employees + the Fortiers
  • 2013 Expenses: $ 75,000
  • 2013 Profit: $ 65,000 (~45% profit margin)

Their initial start up costs were in the $ 40,000 range. Not peanuts; but fairly low by most new business standards.

Did I mention they’re doing this in Quebec? (translation: colder, and shorter natural growing season vs most of North America)

Learning to do more with less, and doing it sustainably, will be a key operating principle for future prosperity. Here’s a model that shows it’s possible to do both, and have good quality of life, to boot.

We need more of these.

(Hat tip to PP.com reader Bill12 who brought the Fortiers onto our radar)

Click the play button below to listen to my interview with Jean-Martin Fortier (34m:16s):

You can also view this video at Youtube

Full transcript available at Peak Prosperity.

Get the book: The Market Gardener


SHTF Plan – When It Hits The Fan, Don’t Say We Didn’t Warn You

Who were the four real heroes whose lives inspired “The Auschwitz Escape”? Fox News publishes my column to remember their names, and honor their stories.

Two heroes who escaped.

Two heroes who escaped.

(Washington, D.C.) — Who were the four real heroes who escaped from Auschwitz 70 years ago this spring, the men whose lives inspired The Auschwitz Escape?

Today FoxNews.com has published a column I have written giving their names and sketching out their dramatic stories.

I hope you’ll take a moment to read the whole column, and then share it with others. Thanks so much.

REMEMBERING FOUR HEROES OF THE HOLOCAUST

They pulled off the greatest escape in human history – from a Nazi death camp – to tell the world the truth about Hitler, but no one knows their names.

By Joel C. Rosenberg, for FoxNews.com

To misunderstand the nature and threat of evil is to risk being blindsided by it.

In 1933, the world was blindsided by the rise of Adolf Hitler. 

In 1939, it was stunned by the German invasion of Poland and the Nazi leader’s bloodthirsty quest for global domination. Perhaps most tragically, most of the world did not understand Hitler’s plan to annihilate the Jews until it was almost too late.

Today, we face dangerous new threats from Iran, North Korea, and a rising czar in Russia, not from Germany. 

Yet curiously, in recent weeks Israeli Prime Minister Benjamin Netanyahu, former Secretary of State Hillary Clinton, and House Majority Leader Eric Cantor have each warned that as we confront current challenges we must be careful to learn the lessons of history regarding how the world failed to understand the threat posed by Hitler and the Nazis and deal with it decisively, before events spun out of control.

I agree, and as an example, I would point the extraordinary events that occurred in the spring of 1944. 

Four men pulled off the greatest escapes in all of human history, from a Nazi death camp in southern Poland. They did not simply escape to save their own lives. Nor did they escape merely to tell the world about a terrible crime against humanity that had been – and was being – committed. What set these true heroes apart is that they planned and executed their escapes in the hope of stopping a horrific crime before it was committed – the extermination of the Jews of Hungary.

To commemorate the 70th anniversary of these escapes, and to draw attention to the significance these unknown – or unremembered – events, and the lessons they have to teach us, I recently wrote a work of historical fiction, “The Auschwitz Escape.” I changed the names of key figures involved so as not to put words in their mouths that cannot be verified to be their own. But it is my deepest hope that the book will cause many to dig into the real history of these remarkable heroes.

Rudolf Vrba and Alfred Wetzler were Slovak Jews. They escaped from Auschwitz on April 7, 1944.

Arnost Rosin was also a Slovak Jew. Czeslaw Mordowicz was a Polish Jew. Together they escaped from Auschwitz on May 27, 1944.

Upon making it safely to Czechoslovakia….

[To read the full column — and please do — click here.]

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Joel C. Rosenberg’s Blog