What You Witnessed

What you witnessed last night if you watched the Super Bowl was a healthy sign for the NFL--the beginning of the end of the B&B run of terror.

Brady and Bilichick, the Batman and Robbin tandem of do anything--including bending the rules to win--took a hit last night, one long overdue. To be sure, the League has it's problems, not the least of which are falling attendance and viewer numbers (According to reports we've seen today, viewership hit an eight year low for the lastest SB event.).

The concussion and kneeling down dilemmas are another problem, over exposure with NFL junk television on all year round. Moreover, the preliminary thrust to expand outside the U.S. is, in our view, another sign of over-saturation. But the game itself has problems. Bad or certainly confusing calls and interpretation of the rules is another thorn much bigger than many, including those in the front office, realize.

The so-called promise of video reviews and replays is the game's version of ying and yang, bringing with it many unintended consequences. In last night's game near the end, a pass was thrown by the Eagles into the end zone where the Patriot defender clearly with both hand pushed the intended receiver way before the already in flight ball got there. If that was not interference, Big Bill Belichick doesn't try to commandeer the sideline signals of other teams.

Those who argue such big games should not be decided by a penalty miss the point. It's about consistency. Change the rules then. Annouced the referees will enforce the rules for, say, three and a half quarters and then anything goes. Or why have any rules at all? This is not a problem isolated to the NFL. College football has similar problems. Missed calls, incorrect calls or none at all. A panoply of lousy decisions by a cadre of so-called experts. It's enough to make you want to not trust a Federal Reserve economist.

Another statistic we espied before the game, one apparent survey claimed only 16 percent of those fans asked wanted the Patriots to win. More powerful owners like Robert Kraft and Jerry Jones is hardly what the league needs, either. Strong arming taxpayer funds, from many of whom don't even know what a football is, to pay for elaborate stadiums remains another. Blame greedy politicians in part for this one.

One other point, SB advertisements. Many viewers from what we've heard tune in mostly for the ads not the game. That too--given this year's pathetic progressive PC crop--also seems in decline.  Perhaps the most ridiculous was Budweiser's "We're here when you need us."

SB 52 in the annals.

Something Rotten

Here's a shoutout to the real, legitimate 2017 College Football National Champions--the University of  Central Florida.

Though two teams next Monday night will play for the phoney College Football Playoff crown, the Knights beat Auburn New Year's Day 34-27 to end their season,13-0. The Tigers this past regular season whipped both Alabama and Georgia. Apologists for the Southeastern Conference claim Auburn didn't play up to their standard because they were still emotionally recovering from their disappointing loss to Georgia in the conference title game.

The SEC apologists also claim UCF didn't play anyone during the regular season. That's interesting. Neither did Alabama. More important, if Auburn went into the Peach Bowl knowing they weren't going to give ticket-purchasers and the television audience their best, honest effort, either the head coach should be fired for failing to get them fully prepared or the school should refund the money they pocketed from the game. And football fans across the country who just tune into the sport because they love the game might want to consider not viewing future Auburn games. Ever. Or until new coach comes around.

We say congratulations to UCF, the true, legitimate 2017 National Champions of college football. And just for the record, we have no ties, associations or whatever to any of the teams and universities mentioned in this article. What we know is this: The current CFP is clearly more pitiful and more biased than the system it replaced.  A shifty bunch, indeed, with six of the 13 committee members toting a heavy Southern bias.

We urge football fans across the nation to purchase UCF champion t-shirts and other paraphenalia and sport it around the country as a protest to the CFP. Speak with the only power tool you possess, your wallet. Forget Denmark.There's something really rotten in college football. And it needs to be corrected quickly. We don't want to spell it out, but we'll give you a hint--heavy regional bias.

Oh! And there's one more thing. All you sponsors who make Auburn games available on national television might want to perk your ears up. Football fans don't want to get hoodwinked into putting serious pocket money out to purchase either tickets or products for a game where one team is going to phone their game in.

Phoning things in can be contagious. Just ask the CFP committee.

Bloated By Corruption And Cover Up

It isn't even bloated Midnight Madness time yet. We don't often go off on other topics, particularly sports, the real life's blood of this sports  junkie nation. But this one doesn't deserve a pass. Signs don't lead; they follow. And the signs have been there longer than a stuttering preacher's sermon.

A teenage high school kid gets a basketball scholarship to go to one of the big boy schools.  Where's the foul in that?  Can somebody ask Jim Boeheim, please?

Pitino spoke about Bowen's recruitment with WHAS-840 Radio's Terry Meiners shortly after the player committed in June.

"We got lucky on this one," Pitino told Meiners. "I had an AAU director call me and ask me if I'd be interested in a player. I saw him against another great player from Indiana. I said 

'Yeah, I'd be really interested.' They had to come in unofficially, pay for their hotel, pay for their meals. We spent zero dollars recruiting a five-star athlete who I loved when I saw him play. In my 40 years of coaching this is the luckiest I've been."

The criminal complaint outlines the involvement of a University-6 coach, who is not listed by name but is described as an assistant coach. 

Rick Pitino most likely uttered the above last June during a radio interview with a straight face. And that's just part of the story of the recent blockbuster in an FBI sting operation into tne corruption, abuse and bribery now swirling around college basketball big time. Pitino for non-sports fans is head basketball coach at the University of Louisville, a school, like it's head coach, that is no stranger to questionable goings-on in college basketball. It's the Big Money Game, forget The Big Dance

If the allegations turn out to involve Pitino, it's hard to think of a more deserving big time college basketball cheat. Recall over the years there's been many. Rumor has it Pitino is considering Dick  Vitale, one of the games biggest apologist, to defend him. Jumping full 360 slam dunk that would be a fun court room scene. Pitino lying through his teeth and Vitale spitting through his.

For anyone who believes there hasn't been dark and dank shenanigans going on in this game for many still in their teens for years, roll over Beethoven and tell the higher-ups at the NCAA the news. Tell them too about the money. A while ago we had some deflated footballs in the news. Maybe this time with a little luck we will get a lot of air let out of the round ball in a game that is reportedly about competition, character building and integrity for student athletes on their journey into adulthood.

Remember Pitino's claim: "We spent zero dollars recruiting a five-star athlete....In my 40 years of coaching this is the luckiest I've been."  If there's fire related to this current smoke, the luckiest Pitino may ever get is staying out of jail, a joint where some thinks he would fit in well. He could coach dome real pick-up games there.

Here are two words for you, Coach Pitino: Prove it.

See https://www.cbssports.com/college-basketball/news/dont-be-shocked-college-hoops-is-dirty-be-surprised-it-took-so-long-to-get-exposed/

 

Roll 'Em Out

In their minds though they won't admit it publicly it's a pejorative, an unflattering term meant to ruffle and scare the future feathers off the masses.

Now we have something in the vernacular--PLUs and PLTs--to summarize the whole thing. People like you, elites, and people like them, the struggling, disaffected masses who have once again started to embrace the term on a global scale. That's more than bothersome to the PLU crowd. It's outright threatening and dangerous.

In case you haven't guessed yet, the term is populism. It's alive and well and growing especially given the upcoming 2017 elections in the Euro zone. With the 2016 surprises of Brexit and Trumpism, the elites have had their caves shook, rattled and quite possibly soon to be rolled. A good thing that could be ultimately a great thing.

Elites for the most part are behind the climate change hoax. Their global footprints stain the planet from all sides and all places in between. Much of the uproar has them scrambling to figure out and offer phony memes for what happened. Their remedy is a familiar one, periodic crumb tossings, so you now have the  PLUs and PLTs. What concessions in the form of not real concessions can we offer the PLTs to quiet them down and return them to their inferior state of oblivion they so cosmically deserve for not being a card carrying PLU member?

There was reportedly no room for them at Davos. That's absurd. And without globalization we're all doomed. So we will create the false meme of how many have globalization lifted from abject poverty. Such ingrates to question things we the elites, the PLUs, see so clearly. Surely their ignorance is the cause for their lot. Why is that so difficult for them, the PLTs to understand?

The Financial Times goes into near conniptions daily with their rants about Trump's anti-free trade and time for tough decisions talk. It's probably giving Martin Wolf, the Times' resident economic bloviator, dyspepsia. It's been time for tough decisions for a long time. Trump is actually really late to that board game. Now that the Times' and the Democrat Party's handpicked stooge has vacated the White House, there is no moral necessity to follow any of his last minutes retaliations against all those who voted red. In fact, the real moral necessity is to overturn them one by one.

Let it be a message from the PLT to the PLU. Turn your gaze next to France, a political psychological basket case of the first degree. The entertainment value their is priceless. More Rolaids for the EU bureaucrats, please! Get 'em while the phony free trade meme is still being pushed as the globe's economic panacea.

Throat Print?

The foot print of Google.

As associate calls it the throat print.

The YouTube channel of influential conservative politics and law website Legal Insurrection has been removed by the video sharing service, citing copyright infringement claims.
“This account has been terminated because we received multiple third-party claims of copyright infringement regarding material the user posted,” explains YouTube, in a notice posted to channel’s page.

Legal Insurrection founder and publisher and Cornell University Law Professor William Jacobson voiced his anger and astonishment at the channel’s removal. “It’s very frustrating, it’s very scary, to have 8 years of content removed without a chance to defend yourself,” he told FoxNews.com.

Founded in 2005, YouTube was bought by Google for $1.65 billion the following year. YouTube now has over a billion users, encompassing almost one third of all users on the Internet.
More: foxnews.com/tech/2017/01/13/youtube-removes-influential-conservative-websites-channel.

The Year Ahead

Gurus come and gurus go. Today, nearly everyone is a guru.

Here's a look at what one popular guru has to say about the the year ahead, Jeffery Gundlach. He always has some interesting thing to say.
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Investors will confront excessive debt, high P/E levels and political uncertainty as they enter the Trump presidential era. In response, according to Jeffrey Gundlach, U.S.-centric portfolios should diversify globally.

Gundlach is the founder and chief investment officer of Los Angeles-based DoubleLine Capital, a leading provider of fixed-income mutual funds and ETFs. He spoke to investors via a conference call on January 10. Slides from that presentation are available here. This webinar was his annual forecast for the global markets and economies for 2017.

Before we look at his 2017 predictions, let’s review his forecasts from a year ago. His two highest conviction forecasts were that the Fed would not raise rates more than once, despite the Fed’s own predictions, and that Trump would win the presidency. Both predictions were accurate.
But he was also downbeat on emerging markets, and singled out Brazil and Shanghai as likely underperformers. Brazil turned out to be the best-performing emerging market last year, gaining 69.1%, but he was correct about Shanghai, which was the worst performing market, losing 16.5%.
Gundlach said he had a “low conviction” prediction that the yield on the 10-year Treasury would break to the upside. It began 2016 at 2.11% and ended at 2.45%.

He said the probability was that U.S. equities would decline in 2016, yet the markets gained approximately 13%. Gold, he said, would hit $1,400 at some point in 2016. It began the year at approximately $1,100, hit a high of $1,365 during the summer and closed at approximately $1,150.
Let’s look at his forecasts for 2017, including the one which he called “the chart of the webcast.”

Doomed by debt?
The U.S. household debt-servicing ratio is at its lowest level since 1980, according to Gundlach, despite what he called an “explosion” in private-sector debt. That ratio would change adversely if rates rise, he cautioned, although that might be offset by an increase in income.
Public-sector debt is at 75% of GDP, not including the portion of the debt owned by the Fed, he said. Gundlach has warned of fiscal debt problems, as he has done in the past, but pointed out that since 2011 federal debt has “leveled out” as a percentage of GDP. But he warned that Trump’s policies would lead to a “steeper slope upwards” as compared to the congressional budget office (CBO) debt projections, which show a 141% debt-to-GDP ratio by 2046.

Trump may deliver the tax cuts he promised to the rich in return for infrastructure and defense spending, Gundlach said, and that would lead to structural debt problems – it would get us to the 141% level sooner than in 2046, he said. Those spending initiatives will not kick in this year, he noted, and might take as long as two years to get going.

Gundlach offered data showing that the deficit will increase faster than it has in the post-crisis period, although those projections were made prior to Trump’s victory, and that the portion of the deficit allocated to mandatory (entitlement) spending has grown steadily over the last 50 years.

The recession watch
The historical pattern has been that a recession has occurred during the first term of a new president, especially when following a two-term presidency. But Gundlach said that the leading economic indicators (LEIs) are positive, and there has never been a recession without those indicators going negative. CEO confidence is “moving up” and consumer confidence is “exploding,” he said, which further supports his prediction that a recession is not imminent.
“President Trump will lead to a breakout of the ‘forever 2% GDP growth’ we have seen for six to seven years,” Gundlach said. “Animal spirits have been stirred.” He noted that a small-business sentiment report released that day was the most bullish it had been in a long time.


More: advisorperspectives.com/articles/2017/01/11/gundlach-s-forecast-for-2017

Government Tracking Grows

Line forms over here.

This is more government intervention phonied up we're here to catch the criminals and help those who need protection.
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It seems too far-fetched to be true, especially in the “land of the free” where the Constitution supposedly recognizes and enshrines certain “inalienable” human rights like individual choice and privacy, but it’s true nonetheless: In the United States, we have all come one step closer to being microchipped by mandate.

As reported by True Activist, about six years ago NBC Nightly News made a bold prediction: That by 2017, all Americans would be fitted with a radio frequency identifier (RFID) chip so that all of us could be tracked by the government in real time (except for the elites doing the tracking, of course). That prediction doesn’t appear to have come true—and with Hillary Clinton soundly defeated Nov. 8, it doesn’t look like it will happen anytime soon.

But what if it did? What if somehow some of us began to be “chipped,” sold to us as a way to ‘enhance public safety’ (which is always the excuse government uses to take away our rights and freedoms)?

Don’t look now, but it just happened.

The government will decide who is ‘mentally unfit’ and must be tracked

As noted by the Daily Caller, in recent days the U.S. House of Representatives “overwhelmingly” passed a bill that would require the U.S. attorney general to provide grants to local law enforcement agencies so they can create, establish and operate “locative tracking technology programs.”
In other words, the legislation—known as Kevin and Avonte’s Law—makes it “legal” for police to track certain U.S. citizens, despite the fact that their privacy is guaranteed by the Constitution’s Fourth Amendment.

The program, which many have likened to the opening of a Pandora’s Box of wider tracking in the future, gives local police the authority to use technology to locate “individuals with forms of dementia, such as Alzheimer’s disease, or children with developmental disabilities, such as autism, who have wandered from safe environments.”

Advocates of the legislation, including Rep. Sheila Jackson Lee, D-Texas, and Rep. Chris Smith, R-N.J., say the measure can help police intervene to avert tragedies through the use of location technology before the mentally disabled wander into trouble. But opponents, like Rep. Louie Gohmert, R-Texas, see it as a way for government to broadly interpret how it uses the technology.
“While this initiative may have noble intentions, ‘small and temporary’ programs in the name of safety and security often evolve into permanent and enlarged bureaucracies that infringe on the American people’s freedoms,” he said. That is exactly what we have here. A safety problem exists for people with Alzheimer’s, autism and other mental health issues, so the fix, we are told, is to have the Department of Justice start a tracking program so we can use some device or method to track these individuals 24/7.”

Later, Gohmert said the bill’s sponsors implore lawmakers and the American people not to worry because it has language saying that any tracking device cannot be invasive and is totally voluntary.

What’s to stop some future authoritarian from widening a tracking program?

But he added that he was confused as to why Republican majorities in both chambers of Congress—the party historically at odds with big government and the massive federal bureaucracy—would be taken in and fooled into approving yet another massive, invasive government program.
He was also astounded that the GOP-controlled Congress would allow the tracking of people with “developmental disabilities”—a term that could have very broad applications—but not approve any tracking of illegal aliens, criminals and other malcontents.

He was also astounded that the GOP-controlled Congress would allow the tracking of people with “developmental disabilities”—a term that could have very broad applications—but not approve any tracking of illegal aliens, criminals and other malcontents.

Therein lies the rub: Who gets to define “mentally incapacitated?” And is that description only limited to persons who have been medically, clinically diagnosed with a “mental” problem?
Because in the recent past, Left-wing activists, politicians and academics have accused alternative media types of being mentally deranged and “propagandists.” Should alternative media journalists be tracked, for the public’s safety?

It’s not that farfetched anymore to think that could happen someday, especially when a “program” establishing ‘official’ tracking of ‘certain’ persons has already been implemented.

newstarget.com/2017-01-09-independent-journalists-will-be-forcible-micro-chipped-by-government-after-being-labeled-with-a-mental-disorder-for-not-believing-propaganda.

 

You Decide

Here's an article that might suggest you might want to vote with your pocketbook when it comes to Best Buy, the owner of Greek Squad, the computer repair business.

There are a couple of ways to do this. Avoiding the stores completely or selling the stock. We're not recommending either, but if the FBI is doing this in the name of protecting us from the bad guys it's another case of we're here not to help you but to  jail you.

We don't buy at Best Buy for the record.
techdirt.com/articles/20170106/10163236419/fbi-is-apparently-paying-geek-squad-members-to-dig-around-computers-evidence-criminal-activity.

The FBI Is Apparently Paying Geek Squad Members To Dig Around In Computers For Evidence Of Criminal Activity

from the maybe-these-are-the-'smart-people'-who-can-fix-Comey's-encryption-&# dept

Law enforcement has a number of informants working for it and the companies that already pay their paychecks, like UPS, for example. It also has a number of government employees working for the TSA, keeping their eyes peeled for "suspicious" amounts of cash it can swoop in and seize.
Unsurprisingly, the FBI also has a number of paid informants. Some of these informants apparently work at Best Buy -- Geek Squad by day, government informants by… well, also by day.

According to court records, Geek Squad technician John "Trey" Westphal, an FBI informant, reported he accidentally located on Rettenmaier's computer an image of "a fully nude, white prepubescent female on her hands and knees on a bed, with a brown choker-type collar around her neck." Westphal notified his boss, Justin Meade, also an FBI informant, who alerted colleague Randall Ratliff, another FBI informant at Best Buy, as well as the FBI. Claiming the image met the definition of child pornography and was tied to a series of illicit pictures known as the "Jenny" shots, agent Tracey Riley seized the hard drive.

Not necessarily a problem, considering companies performing computer/electronic device repair are legally required to report discovered child porn to law enforcement. The difference here is the paycheck. This Geek Squad member had been paid $500 for digging around in customers' computers and reporting his findings to the FBI. That changes the motivation from legal obligation to a chance to earn extra cash by digging around in files not essential to the repair work at hand.
More of a problem is the FBI's tactics. While it possibly could have simply pointed to the legal obligation Best Buy has to report discovered child porn, it proactively destroyed this argument by apparently trying to cover up the origin of its investigation, as well as a couple of warrantless searches.

Setting aside the issue of whether the search of Rettenmaier's computer constituted an illegal search by private individuals acting as government agents, the FBI undertook a series of dishonest measures in hopes of building a case, according to James D. Riddet, Rettenmaier's San Clemente-based defense attorney. Riddet says agents conducted two additional searches of the computer without obtaining necessary warrants, lied to trick a federal magistrate judge into authorizing a search warrant, then tried to cover up their misdeeds by initially hiding records.

The "private search" issue is mentioned briefly in OC Weekly's report, but should be examined more closely. Private searches are acceptable, but the introduction of cash payments, as well as the FBI having an official liaison with Best Buy suggests the searches aren't really "private." Instead, the FBI appears to be using private searches to route around warrant requirements. That's not permissible and even the FBI's belief that going after the "worst of worst" isn't going to be enough to salvage these warrantless searches.
As Andrew Fleischman points out at Fault Lines, the government's spin on the paid "private search" issue -- that it's "wild speculation" the Best Buy employee was acting as a paid informant when he discovered the child porn -- doesn't hold up if the situation is reversed. AUSA Anthony Brown's defensive statement is nothing more than the noise of a double standard being erected.

Flipping the script for a minute, would an AUSA say it was “wild speculation” that a man was a drug dealer when phone records showed he regularly contacted a distributor, he was listed as a drug dealer in a special book of drug dealers, and he had received $500.00 for drugs? Sorry to break it to you, Mr. Brown, but once you start getting paid for something, it’s tough to argue you’re just doing it for the love of the game.

In addition to these problems, the file discovered by the Best Buy tech was in unallocated space… something that points to almost nothing, legally-speaking.

[I]n Rettenmaier's case, the alleged "Jenny" image was found on unallocated "trash" space, meaning it could only be retrieved by "carving" with costly, highly sophisticated forensics tools. In other words, it's arguable a computer's owner wouldn't know of its existence. (For example, malware can secretly implant files.) Worse for the FBI, a federal appellate court unequivocally declared in February 2011 (USA v. Andrew Flyer) that pictures found on unallocated space did not constitute knowing possession because it is impossible to determine when, why or who downloaded them.

This important detail was apparently glossed over in the FBI's warrant application to search Rettenmaier's home and personal devices.

In hopes of overcoming this obstacle, they performed a sleight-of-hand maneuver, according to Riddet. The agents simply didn't alert Judge Marc Goldman that the image in question had been buried in unallocated space and, thus, secured deceitful authorization for a February 2012 raid on Rettenmaier's Laguna Niguel residence.

Courts have shown an often-excessive amount of empathy for the government's "outrageous" behavior when pursuing criminals. The fact that there's child porn involved budges the needle in the government's direction, but the obstacles the FBI has placed in its own way through its deceptive behavior may prevent it from salvaging this case.
The case is already on very shaky ground, with the presiding judge questioning agents' "odd memory losses," noting several discrepancies between the FBI's reports and its testimony, and its "perplexing" opposition to turning over documents the defense has requested.
In any event, it appears the FBI has a vast network of informants -- paid or otherwise -- working for both private companies and the federal government. Considering the FBI is already the beneficiary of legal reporting requirements, this move seems ill-advised. It jeopardizes the legitimacy of the evidence, even before the FBI engages in the sort of self-sabotaging acts it appears to have done here.

Underneath it all is the perplexing and disturbing aversion to adhering to the Fourth Amendment we've seen time and time again from law enforcement agencies, both at local and federal levels. Anything that can be done to avoid seeking a warrant, and anything that creates an obfuscatory paper trail, is deployed to make sure the accused faces an even more uphill battle once they arrive in court. 

Your Choice

Only four states now have Democrat governors, Rhode Island, Hawaii, Delaware and, of course, the big blue C-California.

That's part of the Obama legacy if there were any honest historians not infused with and all tatted up with revisionist genes. It's not a time for celebration. It's time to push harder and harder and keep pushing. There's an edge out there, a cliff and it has a name--the Cliff of Oblivion. As one writer recently noted: "After eight years of the Obama presidency, Democrats hold fewer elective offices than at any time since the 1920s." Skip the hearts and flowers. Someone just needs to play taps.

The left has been ruthless, using their power, their money, their arrogance, their conceit, their name-calling, their PC bullshit, their hate to quiet, to threaten, to paralyze, to punish, to even influence one's work opportunities. That's right, their economic ability to make a living if they fail to agree with zero tolerance. Free speech is only okay as long as the outcomes suit the elites. Fake news sites are code for some things are too true to see the light of print. The once so-called bane of the left, McCarthyism, is being revamped, a communist lurking in every refrigerator of all those red state voters and bloggers.

It's all the fault of fake news! And those damn Russians.

They love to sing the siren's song of promise for your vote but deep inside distrust and loathe your ability to discern the difference between truth and propaganda. So if not the people who's left to guard the precious hen house from the foxes when the elites turn vile, ruthless and corrupt? In a system where votes, agencies and central banks are bought and stamped sacrosanct, the global upheaval is long overdue.

Politicians are long on jabber and short on flesh and bones. Republicans now control 25 state capitals. There's no rule of thumb that says these politicians will do what they should, bring this nation more to the center. Political correctness needs to be killed, dead in its tracks. It's really the only hope humanity has. All the phony concern about climate change if drastically left unchanged will decimate humanity is absurd. If the human race finally destroys itself, it will be because of PC not climate change fallacies. PC is far more noxious than any and all greenhouse gases.You can legislate hate, but you can't legislate love.

That should be just one of the lessons of this one. What went from five trillion of government debt to ten trillion under eight years of a so-called Republican president just went from ten trillion to twenty trillion under eight years of a so-called Democrat. Say hello to that warm spot in your heart for bureaucrats and politicians.

Everyone in the country will pull a winning ticket for the Super lottery before that debt ever gets repaid.  And now we're hearing the funeral pyre for globalization and that dreaded, hateful existence once called sovereignty threatens to return and impoverish any and all. Local control, a possible say so in your life, preposterous. There's still drug money laundering afoot. Let's confiscate all of everyone's cash. That will screw up all those bad folks with evil intentions in flyover land who do all those drugs.

First there occurred darkness then there was light. First there was Wall Street and it political cronies then there was money laundering. It's a tactic as old as governments. Punish the many innocents to capture the few evils. This is about control, nothing more and everything less. You can wake up or slumber your way into their bureaucratic wasteland of freedom-less choice and monotonous economic and spiritual poverty. The choice is yours for now.

Think You Need To Wait?

Think You Need to Wait to Purchase Your Next Home?

Think Again!

By Anthony Wheaton January, 2017

FMRealtyConsulting.com

Whatever happened to the dream of home ownership in America? 

Are houses too expensive, wages and salaries too flat? Is being a “long-term renter” (defined as renting for more than one year) the new normal in today’s housing market? 

Regardless of the answers, one simple truth remains – many renters would prefer be homeowners, but can’t qualify for a mortgage loan. As such, they feel as if they have no other choice than to wait and wonder if or when it’s ever going to happen. That said it’s our opinion that home ownership is much closer than many people realize, once they begin to receive the right kind of information and assistance.

Since the housing market crash of 2008 and the resulting overregulation that followed, the institutional mortgage lending establishment has stifled the dream of home ownership as many Americans once knew it. In short, the pendulum of reform has swung too far in the opposite direction, which has artificially augmented the renting population, as well as the rents. In California, for instance, in both Los Angeles and Orange counties, to name just a few, rent payments on condos and single family homes exceed the cost of a mortgage on those very same properties. 

Traditionally, the point at which rent payments become equivalent to or greater than mortgage payments is when the market “adjusts” (self regulates) and renters make the decision to become homeowners. However, big government regulations, overly stringent credit markets, and a variety of other factors are obstructing the natural order of the free market. Therefore, we have a new problem – a drought in mortgage financing.

According to the Consumer Housing Trends Report 2016, published by the Zillow Group, 56 percent of today’s renters are Millennials (ages 18-34), as many would expect, yet a staggering 28 percent of the renter pool is part of Generation X (ages 35-49), which is a far more troubling statistic. Heck, even the Baby Boomers (ages 50-64) make up a whopping 12 percent of the renting population at large! But, for the sake of this discussion, let us focus our attention on the first two groups, as they make up the vast majority of the renting population.

The reasons for renting are numerous, but essentially fall into one or more of the following four categories:

•

Flexibility (e.g., not being tied down to a mortgage or housing maintenance responsibilities, liberty to move about the country to capitalize on career opportunities, etc.)

•

Convenience (e.g., closer proximity to work than a purchased home, waiting for kids to finish school before settling, etc.)

•

Affordability (debt and income challenges)

•

Credit Challenges (debt load, late payments, collection accounts, and other derogatory items)

The first two categories (Flexibility and Convenience) represent a particular lifestyle choice and are, for the most part, voluntary in nature. On the other hand, the latter two categories (Affordability and Credit Challenges) are a simple matter of financial feasibility – that is, if these individuals were financially fit to purchase a new home (in the eyes of their lender) then they would certainly not choose to rent an apartment.

 In fact, the reality is that many long-term renters actually prefer to be homeowners, but simply cannot qualify for a mortgage loan.Therefore, after being declined for a loan, and having no alternative solutions, many would-be home buyers resign to continue throwing away their hard earned money on outrageously high rent, instead of building equity. I’ve personally known a number of these people, both past and present clients, and the feelings they all share are the same: lack of resolve, frustration, anxiety, and urgency.

It’s no secret that housing prices in southern California are rising. It’s also pretty obvious that interest rates have nowhere else to go but up, as evidenced by the Fed’s recent interest rate hike (0.25% increase) back in December, and plans for future raises this year. And if that’s not bad enough, the fact that wages and salaries are pretty much flat, and the credit markets still very tight, only adds insult to injury. Hence, one might deduce that affordability is at a definite low.

Having said that, if you make good money, have substantial savings for a down payment, but have some credit challenges and were previously declined for a mortgage loan, then I am here to tell you that home ownership is absolutely within reach.

So, how can this be done? First of all, please keep in mind that, as with most endeavors, there are usually a number of different ways that one can achieve the same objective. Home ownership is no different. Below is an example of a recent purchase transaction I helped a client of mine put together, which closed this past December.

Deal Summary:

My client was looking to purchase a luxury condominium in downtown Los Angeles. He is an entrepreneur, earns a very nice living, and has the capacity to pull together a substantial down payment. However, along the way of his entrepreneurial journey (the year 2011, to be exact), he had a failed business venture, which cost him tax and credit problems, among other things. Nevertheless, like many others, he was fed up with watching his rent dollars going away and never returning, so, one day, he contacted a mortgage broker to help him locate a lender who could pre-approve him for financing. Unfortunately, that day never came, so he reached out to me for help.

After a brief consultation, we concluded that a rent-to-own scenario would be the best fit for him. We also recognized that just about all of the mainstream banks, credit unions, and other institutional mortgage lenders simply didn’t have the appetite to finance someone with his particular credit profile. Therefore, I needed to find a smaller, portfolio lender who would – and we did.

Essentially, our client needed approximately six months to remedy a few credit issues and move around monies to secure his down payment. So – the we went to work and locate a beautiful, contemporary loft in the downtown Los Angeles Arts District. We negotiated a six month lease, with the option to purchase the property at any time prior to expiration of the lease. The Option to purchase the property cost my client $15,000 (non-refundable monies, which are applied to the purchase price, at closing). His lease payment was $3,500 per month, with a $9,000 Rent Credit (also monies which are applied to the purchase price, at closing).

The Numbers:

Purchase Strategy:	Rent-To-Own/Lease-Option
Lease Term:	6 months
Lease Payment:	$3,500/month
Security Deposit:	$5,750
Asking Price:	$669,000
Option Deposit:	$15,000 (non-refundable)
Rent Credit:	$9,000
Contract Price:	$645,000
Down Payment:	$161,250
Earnest Money Deposit:	$4,350
First Mortgage:	$483,750
Monthly Payment:	$2,206/month
Lease vs. Mortgage Savings:	$1,294/month

If rent-to-own is a new concept to you then it might seem a bit complicated, at first glance, but I assure you that all of this transpired without a hitch, and all parties walked away from the transaction happy winners.

In closing, if you truly believe that you have no other choice than to continue paying high rent and wait to purchase your first or next home then I would implore you to, at least, consider the possibility that you could be terribly wrong. And then I would challenge you to both seek out alternative solutions and speak with a competent real estate professional who knows more about nontraditional real estate financing than your average broker or agent. After all – we are NOT created equal! I sincerely hope you make 2017 the year you finally “pull the trigger."

Best Wishes.

Anthony Wheaton
BRE# 01965458
Direct: (562) 353-7101
Email: anthony@fmrealtyconsulting.com
Website: fmrealtyconsulting.com