Occupy L.A. takes its fight to foreclosure auction
Occupy L.A. protesters brought along a tent — a symbol of their encampment — as they demonstrated outside the Norwalk courthouse, where a foreclosure auction was being held on homes throughout Los Angeles County. (Genaro Molina / Los Angeles Times / December 2, 2011)
Protesters disrupt bidding outside Norwalk courthouse on homes owned by banks and title companies with chants of 'Shame on you' and 'Banks got bailed out / We got sold out.'
By Kate Linthicum, Los Angeles Times December 3, 2011
Several times a week, a group of investors gathers in Norwalk to bid on homes that have been foreclosed.
The midmorning auction outside the Los Angeles County Superior Court building is a high-stakes, but usually low-key affair. On Friday, bidders sat in the sun in lawn chairs, and the auctioneer looked relaxed in a pair of baggy sweat pants.
But just as the auction was getting started, a commotion erupted from across the lawn. It was a group of protesters, marching with posters and howling an angry chant. "Banks got bailed out / We got sold out!"
Some wore T-shirts identifying themselves as members of local labor unions. Others wore arm bands printed with "99%" — a now-famous reference that revealed a different allegiance.
Occupy L.A. may have lost its home outside City Hall this week, but protesters plan to continue the acts of civil disobedience that helped the movement capture national attention.
Demonstrations against the foreclosure process may be key among them, said one protester who spent nearly two months living on the City Hall lawn at Occupy L.A., and who hitched a ride to Norwalk to take part in Friday's action.
The protester, Abe, wouldn't give his last name, but said anger at the foreclosure crisis, and at banks that he believes haven't done enough to help homeowners get more favorable loans, helped draw him to Occupy in the first place.
Friday's protest was organized in conjunction with Good Jobs L.A., a coalition of labor unions and other community organizations. Although some within the Occupy movement have expressed fears that their protest may be co-opted by other groups — including unions — Abe said he isn't worried about that.
"I don't think we should align with any power structure," he said. "But anyone who wants to stand in solidarity with us, we're happy to have them."
As the protesters circled the auction, the bidders drew closer so they could hear over chants of "Shame on you!"
On the auction block this day were properties from throughout the county — from Torrance to Van Nuys. Next up was a home on West 59th Place in South L.A.
The protesters booed. The bidding started. "Do I have $113,300?" the auctioneer asked. He is hired to sell the properties by the banks and title companies that own the homes.
"$115,000" said one man.
"$116,000," said another.
The price climbed and climbed. When it hit $130,000, protester Carlos Marroquin started shouting.
"Whose home is that? Whose home are you buying?" he yelled. "Do you know that families are breaking apart? People fought for those homes, and you guys are just taking them away."
Marroquin, who lost his own home to foreclosure, said he speaks from experience. "It destroyed my marriage and hurt my kids," he said.
A member of Occupy L.A. since its Oct. 1 beginning, he set up a tent there and said he helped counsel 300 families facing foreclosure.
At first, bidders seemed amused by the hubbub — and the news reporters and photographers it had attracted.
"I kind of like it," one said to another. "I like crazy, though."
But as the morning wore on, and one protester held a microphone up to an amplification system, producing a deafening squeal, the bidder's patience wore down. "They're getting annoying," he said.
Another bidder, Mike Lalani, told protesters that the buyers were the wrong target.
"Your protest is good, it's great, but it's misguided," he said. "You need to be saddened that these homes are being lost in the first place."
The auctioneer agreed: "You guys need to go higher on the food chain."
They have, of course. Last month, police arrested dozens of protesters in demonstrations in downtown's financial district, including one at Bank of America plaza.
At that protest and elsewhere, protesters have deployed tents — a symbol of the Occupy L.A. encampment — in their demonstrations.
A tent made an appearance Friday, when protesters offered to sell it to the bidders. A vigorous bidding war broke out. The final price: $20.
Former Vice President Dan Quayle will endorse Mitt Romney for president in an Arizona event on Tuesday.
Mark Halperin: .. http://thepage.time.com/2011/12/05/ap-quayle-to-endorse-romney/ .. "The Establishment is going to increasingly close ranks around Romney. They did the same for Bob Dole in 1996. Then Pat Buchanan won the New Hampshire primary. Then the Establishment closed ranks more, and Dole fought Pat off. But/and: this is a different time."
Alexander Burns: .. http://www.politico.com/news/stories/1211/69820.html .. "Quayle is, obviously, not one of the most admired people in American politics, and if this is the major endorsement Romney's campaign teased this week, it falls a bit short of the billing."
.. a link in that one ere leads to multiple F6 libraries ..
OT aside, just because one came up in the library search ..
Where We Find The Solutions To Our Problems
The reason why I write about the stuff that I do and why people find it useful is because I’m a bit odd in the way I think. I naturally tend to look at things from a zoomed out mode. From this perspective problems are a thousand times easier to solve, because NOW is just part of the bigger picture and when you have enough distance you lose the urgency of time and you get to see more possibilities.
When we hit emotional blocks, it’s like hitting obstacles in a car. You can’t just keep accelerating, you have to step out of the car and assess the situation and plan your next steps until the path is clear. Likewise when you hit an emotional block you need to step back from the situation until you can see the way to get back on track. .. http://investorshub.advfn.com/boards/read_msg.aspx?message_id=68887356
DETROIT — After three years of settling for second place, General Motors reclaimed its title as the world’s largest automaker in 2011, a year when its sales grew in every region of the globe while Toyota sales were hampered by major natural disasters.
G.M. said Thursday that it sold 9,025,942 vehicles last year, 7.6 percent more than in 2010. Its closest competitor was Volkswagen, whose sales grew 14 percent to 8.156 million, with Toyota falling to third place.
Toyota has not released final sales results for the year but last month it estimated that sales totaled 7.9 million vehicles, a 6 percent drop.
The industry’s sales crown means little beyond bragging rights. But G.M.’s ability to climb back on top, only two years removed from its government rescue and bankruptcy, is certain to bolster morale within the company and strengthen the Obama administration’s argument that its bailout of the industry was worthwhile. G.M. was the world’s largest automaker for more than 70 years before Toyota surpassed it in 2008.
“Two years ago, nobody would have figured any of this would ever happen,” said Van E. Conway, chief executive of the turnaround consulting firm Conway MacKenzie, of Birmingham, Mich. “The intangible value of being No. 1 does have a positive impact, and it can feed on itself.”
Publicly at least, G.M. executives have been careful to avoid celebrating amid Toyota’s struggles. Toyota only recently was able to return production to normal levels after the earthquake and tsunami in Japan last March caused major disruptions and parts shortages.
“I want to win in the marketplace, but I want to win against a healthy and vibrant Toyota and Honda,” G.M.’s chief executive, Daniel F. Akerson, said in an interview last year. “Next year, we’ll put the gloves back on, and I’m sure they’ll go right back at us and we’ll go back at them.”
G.M. chose not to highlight its first-place finish Thursday, burying its global sales figures at the bottom of an announcement about its Chevrolet brand selling a record 4.76 million cars and trucks last year.
At the Detroit auto show last week, Mr. Akerson said G.M.’s focus was on increasing profits and margins, but he acknowledged that rising sales were a positive indicator of the company’s progress.
“We’re not going to achieve the financial goals that we want to achieve and have declining market share or declining numbers of units sold,” he told reporters. “It’s one indicator. What’s most important for our owners, our shareholders, is that we produce margins and profits and cash flow.”
G.M. shares rose 31 cents Thursday, to $24.82. They have risen 22 percent so far this month but remain well below the $33 price from G.M.’s initial public offering in November 2010. The Treasury Department, which still owns about 26 percent of G.M., needs the shares to reach roughly $54 to recoup its full investment in the company.
G.M., whose sales figures include its joint ventures in China, will need to continue increasing its sales to stay on top in the years ahead, if Toyota and Volkswagen are able to meet their ambitious forecasts. Toyota last month said it was aiming to sell 8.48 million vehicles in 2012 and nearly 9 million in 2013, not including some affiliate companies that are included in last year’s 7.9 million figure. Volkswagen is setting a target of 10 million in annual sales by 2018.
Volkswagen sales came in at 8.16 million, and Toyota’s are expected to be about 7.9 million, the New York Times [above] notes.
The results aren’t a huge surprise, particularly given Toyota’s myriad troubles: the strength of the yen and natural disasters in Japan and Thailand have hurt the company’s supply chain. But they do indicate that GM continues to gain market share around the world. The company said in its release that its market share rose to 11.9%, an increase of four-tenths of a percentage point.
Video [embedded] Dismantling Detroit: The filmmakers Heidi Ewing and Rachel Grady look at young men who salvage scrap metal from Detroit’s derelict buildings, set against the backdrop of globalization [ http://www.youtube.com/watch?v=qTEIGtHXOT4 ].
By HEIDI EWING and RACHEL GRADY Published: January 18, 2012
We chose to focus our cameras on Detroit out of a gut feeling that this city — often heralded as the birthplace of the middle class — may well be a harbinger of things to come for the rest of the country.
Detroit lost 25 percent of its population between 2000 and 2010, and now, broke, finds itself on the verge of a possible state takeover. Yet visual reminders of a better time both haunt and anoint the residents here. The past is achingly present in Detroit, and the way its citizens interact with the hulking, physical remnants of yesterday is striking.
A few years ago, there was a rash of power outages in Detroit, caused by people illegally cutting down live telephone wires to get to the valuable copper coils inside. The Detroit police created a copper theft task force to deter the so-called “scrappers,” young men who case old buildings for valuable metals, troll cemeteries to steal copper grave plates and risk their lives to squeeze any last dollar out of the industrial detritus.
One freezing evening we happened upon the young men in this film, who were illegally dismantling a former Cadillac repair shop. They worked recklessly to tear down the steel beams and copper fasteners. They were in a hurry to make it to the scrap yard before it closed at 10 p.m., sell their spoils and head to the bar.
Surprisingly, these guys, who all lacked high school diplomas, seemed to have a better understanding of their place in the global food chain than many educated American 20-somethings. The young men regularly checked the fluctuating price of metals before they determined their next scrap hunt, and they had a clear view of where these resources were going and why. They were the cleanup crew in a shaky empire. Somebody’s got to do it.
One of the men, who had come up from Kentucky to scrap after losing a job in a coal mine, stands out in our minds. Taking a short break from the action, he looked up and said with disgust, “All that’s left here are the remnants of what was.”
The next day we went back to check on the progress of their project. The entire building was gone.
Heidi Ewing and Rachel Grady are documentary directors and the co-owners of Loki Films, based in New York. This Op-Doc draws on some of the material from their upcoming feature-length documentary, DETROPIA, which is premiering at the 2012 Sundance Film Festival. In 2007 they were nominated for an Oscar for “Jesus Camp,” a candid look at the power of the Christian right.
This video was produced by independent filmmakers supported in part by the nonprofit Sundance Institute and the Ford Foundation.
The lion’s share of the wealth Mitt Romney accumulated during his years at Bain Capital was extracted not only by laying off workers and raiding their pensions, but by using what conservatives call “big government” to redistribute wealth from taxpayers to Bain’s investors and partners.
Bain Capital was not in the business of creating jobs, or even saving companies over the long-term. Its model had a relatively low rate of success; a study by Deutche Bank found .. http://www.vanityfair.com/politics/2012/02/mitt-romney-201202.print .. that 33 out of 68 major deals cut on Romney’s watch lost money for the firm’s investors. Its richest deals made up for the flops, however, and Bain’s partners were guaranteed hefty fees regardless of how the businesses they “restructured” ultimately performed.
“By and large, [government] gets in the way of creating jobs,” Romney said during a GOP debate last year. But, as the Los Angeles Times .. http://articles.latimes.com/2012/jan/12/nation/la-na-bain-subsidies-20120113 .. noted, “during his business career Romney made avid use of public-private partnerships, something that many conservatives consider to be ‘corporate welfare.’”
On the campaign trail, Romney often touts a successful investment in an Indiana steel company called Steel Dynamics, but he doesn’t mention that the firm had taken advantage of “generous tax breaks and other subsidies provided by the state of Indiana and the residents of DeKalb County, where the company’s first mill was built.”
But that’s a small part of the public largesse Bain enjoyed. Most of the big money the firm brought in during those years was extracted through “leveraged buy-outs,” a reality that Romney doesn’t like to talk about on the campaign trail. Instead, he wants to talk about Staples, which was one of a small handful of Bain’s venture capital deals. The 89,000 people employed at the office supply chain go a long way toward the campaign’s dubious and unsourced claim that Bain “created 100,000 jobs” under Romney’s tutelage. But venture capital represented a small share of Romney’s deals, and it’s important to understand the distinction between venture capital and leveraged buy-outs.
You won’t hear much criticism of venture capital deals like Bain’s investment in Staples. It’s a very basic free-market transaction — investors put money into a company at its early stages in exchange for a share of the company. If the start-up doesn’t pan out, the investors lose their stake; if it grows and matures, they make healthy profit, usually when the company goes public or is sold off. In venture capital deals, investors only make a profit when the company that receives their cash does well.
Leveraged buy-outs are a different creature entirely. Leveraged buy-out firms became so closely associated with the most rapacious and unsustainable form of capitalism in the 1980s, that the entire industry rebranded itself as “private equity” to escape the stigma.
Leveraged buy-out artists also deal with risky companies — usually those struggling to stay afloat — but they don’t actually take on much risk themselves as they structure the deals so they profit whether the target company becomes healthy and grows or collapses, often under the weight of debt piled onto it by the private equity firm itself.
Here’s how the deal works. The leveraged buy-out firm will put down a fraction of the cost of buying an ailing company. The balance of the transaction is borrowed, but the debt goes onto the books of the target company, not the private equity firm — the struggling company basically finances the lion’s share of its own sale.
And here’s the key point: The target company’s debt payments increase significantly, and those debt payments are then written off, reducing its tax burden significantly. This subsidy increases short-term revenues — at the expense of long-term debt — and that, in turn, is paid out in dividends to Bain’s investors and a fat stream of management fees that Romney and his partners skimmed off the top.
(The industry-standard structure of these deals is known as “2 and 20.” Management gets 2 percent of the capital that they invest as a fee, and 20 percent of the profits that the fund realizes. That 2 percent represents between 2-4 times what the average management fees for a mutual fund usually run, and is collected regardless of how the fund does.)
Josh Kosman, author of “The Buyout of America, “How Private Equity Is Destroying Jobs and Killing the American Economy,” told Mike Konczai .. http://www.newdeal20.org/2012/01/12/josh-kosman-on-the-loopholes-that-fuel-private-equity-buyouts-69122/ .. that a typical leveraged buy-out deal decreases a target-company’s tax burden by half. A recent study by researchers at the University of Chicago estimated that the average tax benefit of these companies’ increased debt-loads in 1980s equalled “10 to 20 percent of ?rm value,” which, as Konczai noted, “is value that comes from taxpayers to private equity as a result of the tax code.”
This is important to understand as it lays bare the defenses Romney’s spinmeisters have employed to fend off criticism of his past as what Rick Perry called a “vulture capitalist,” and Newt Gingrich described as a business based on “figuring out clever legal ways to loot a company.” (Let’s pause here to savor the hypocrisy: a Texas teachers pension fund, one of the largest in the state, is an investor in Bain, and all of its trustees are Perry appointees, and Gingrich himself sat on a board of Forstmann Little. A major competitor of Bain Capital.)
First, those criticizing what private equity funds like Bain do are not assaulting the “free enterprise” system. To the contrary, they are calling out a gamed tax system which guaranteed that Romney and his partners would make healthy profits, regardless of whether the companies they acquired went belly-up. Romney claims that he took risks and shouldn’t be criticized for reaping the rewards, but the game Bain played was in fact antithetical to the free-market model.
Second, one need not be “envious” of Romney’s fortune to be bitter about the means by which it was accrued. Contrary to the line Romney and his flacks have adopted, critics are not begrudging him riches won by hard work and prudent investment. Bain is deserving of our opprobrium for its rent-seeking at the expense of workers at the companies it bought out and through a series of tax subsidies, and Romney’s hypocrisy in suggesting that he was simply a free marketeer must be called out.
Romney talks a lot about “creative destruction” — about how he made the hard decisions that would allow troubled, inefficient firms to grow. But Bain’s interest was to its investors, and it flipped companies quickly, reaping huge profits and often leaving them saddled with debt — often high-interest debt financed with “junk bonds” — that they struggled to service.
That short-term focus didn’t necessarily serve its acquisitions well. Another steel mill, one Romney doesn’t discuss on the campaign trail, is South Carolina-based GS Industries. Bain acquired the company for $24.5 million in 1993, and by the end of the decade Bain estimated that its partners had made $58.4 million on the deal, including “multimillion-dollar dividends” and “annual management fees of about $900,000,” according to the Boston Herald. .. http://news.bostonherald.com/news/us_politics/view.bg?articleid=1395881&format=text .. Bain left the company saddled with over a half-billion in debt, and it filed for bankruptcy in 2001.
“We were doing well and then Bain Capital bought us and they took everything they could out of the company without making the investments we needed to stay competitive,” James Sanderson, who had worked at the mill since 1974 told the Herald. “They ran the company into bankruptcy.”
Sanderson said the fund “replaced longtime managers who had built Georgetown Steel with bean counters looking for ways to cut costs.”
Along the way, 1,750 workers lost their jobs. According to the Herald, “less than a year after taking a controlling interest in the Georgetown plant, Bain Capital cut the employees’ profit-sharing plan twice — lowering the plan’s hourly rate from $5.60 an hour to $1.25 per hour.” The profit-sharing plan was soon phased out altogether.
Layoffs and benefit cuts led workers at the company’s Kansas City, Missouri plant to strike for the first time in four decades. A state legislator accused Bain of union-busting during the 10-week dispute. Sanderson told McClatchy in 2000 that Bain “forced a labor dispute at every location.”
This is the model of “free-enterprise” that Mitt Romney brags about, and on which he built an estimated $200 million fortune. It’s the model on which he continues to make millions of dollars today. According to the New York Times, .. http://www.nytimes.com/2011/12/19/us/politics/retirement-deal-keeps-bain-money-flowing-to-romney.html?_r=1&pagewanted=1 .. “the final deal of his private equity career” was a “retirement agreement with his former partners that has paid him a share of Bain’s profits ever since.”
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