Revenues For Canada’s Oil Towns Dwindle As Firms Stop Paying Taxes

[Dan Warnick + 6,100]

In case anyone forgets, I believe @Jan van Eck warned of a continuing crisis unfolding in parts of Canada:

Revenues For Canada’s Oil Towns Dwindle As Firms Stop Paying Taxes

And, this article from Oil Price contributor Tsvetana Paraskova gives further evidence that Jan, unfortunately for Canada, seems to know of what he speaks:

(Excerpt)

A new discontent is brewing in Canada’s oil patch—insolvent oil firms or energy companies trying to stay afloat amid low Canadian oil prices have started to lag in municipal tax payments or have stopped paying taxes altogether, The Globe and Mail reports, noting that losses on missed tax payments could be in the tens of millions of Canadian dollars.

Although there aren’t precise figures about how much money municipalities in the provinces in Alberta and Saskatchewan are losing from laggard oil tax payers, the potential revenue decline has started to cause a discord between municipalities and oil companies, The Globe and Mail notes.  

[Justin Hicks + 162]

When you can't get the product to market......

[Jan van Eck + 7,558]

Unfortunately, what you are seeing is just the tip of the iceberg.  The cascading effect will be that there will be a series of defaults, and the internal credit system will get under major pressure.  When municipalities cannot collect their taxes, they have the theoretical recourse to lien against the tax debtor, which ultimately causes a Filing in the Canadian bankruptcy system  (which runs differently than the American one).  At that point the Town might end up with some recovery of past taxes, but then the firm is completely, and probably irreparably, out of business, and the employees out of paychecks forever.  Then those folks will be unable to pay their property taxes, and if the Town then starts foreclosing on houses, there will be no buyers and the displaced workers will literally leave town.  Now you end up with an empty town, the body of workers eviscerated, and the town itself cannot pay its bills.  Layoffs hit, the roads go unrepaired, and the school system gets gutted.  Eventually, the Town shuts down. 

In the oilpatch, everyone is dependent on the oil.  And the oil companies cannot operate if either the price for oil is too low to generate a positive margin, or if the product cannot get out to the customer due to lack of infrastructure.  Both those conditions exist today, and it looks like it is going to get a lot worse. 

Alberta (Provincial Govt) is so alarmed that it is both ordering a fleet of oil tankcars for the railroad service, and intends to build a big refinery right in the oilpatch, to produce domestic fuels and keep those funds circulating within the Province - and provide a captive market.  Will that do the trick?  Probably not, but it will help stem the slide. It will require Ottawa instituting barriers to the import of fuels, and oblige the country to run on Alberta oil.  In essence, Ontario and Quebec will be forced to use Alberta crude as feedstock for their refined products.  Whether or not those Provinces are prepared to do that is another question. 

The pressure is really on.  GM Canada has announced that it is shutting down its last big auto assembly plant, GM Oshawa outside Toronto.  That is a huge blow; Oshawa probably employs 5,000 men in there. GM will end up with only the transmission plant in St. Catharines, unless that is already closed (I have not kept track on that plant).  Ford has already closed St. Thomas,  so other than a small Hyundai/Kia plant and a Honda operation, there is not much left of Canadian auto manufacturing.  They just cannot make it work in the Canada of today, with the governments so totally clueless about the fundamentals of industry.  Amazing how really smart people can be so totally dumb when it comes to understanding the principles of making money.  Just unreal. 

[Karl V + 33]

Transition from agriculture to industry and now to service ( butlers and maids ) .

 

The psychological worth of food in Germany had declined , most grocery stores lost customers to discouters like Aldi, Lidl , who always have a long queue at the cashier line all opening hours , while at the middle class stores the cashiers have some fifteen seconds idle time once a while .

 

Probably we will see such in maufacturing , too : Very cheap devices from East Asia , and a waiter in a restaurant might earn much more , than a rabotnik at some assembly line .

 

[Jan van Eck + 7,558]

Yet the Canadian economy suffers from these astounding distortions.   The bureaucrats insider the Federal Government decided that a population of 25 million was "insufficient" to provide enough of a consumer base to support Canadian manufacturing, so it went on a big blitz to import immigrants.  Unfortunately for  that grand plan, the society was not geared up for any such influx, especially as large numbers of these migrants came from outside the traditional English-speaking Commonwealth countries.  Then French-speaking Quebec demanded independent control of immigration into Quebec, so as to import French-speaking persons (to protect the patrimony). Ottawa caved to that, and Quebec started bringing in migrants from impoverished but French-speaking countries, such as Haiti and Cote d'Ivoire.  That project seems to have had mixed results. 

Meanwhile, over in Ontario, the big migrant influx has been settling in the Greater Toronto Metro Area.  The problem with this is that in the past various Planners had set aside greenbelt space to avoid urban sprawl.  This led to a dramatic shortage of land to build new houses, and now the housing developments have pretty much zero space between the homes shoveled onto tiny lots.   This land shortage has driven prices through the roof, with a typical resale house in Toronto now at the million-dollar mark.  the net effect is that Canadians are "house poor," with all of their income going into paying for the house, and nothing left over for disposable income.  And, in turn, that creates a purchasing vacuum among consumers, exactly the situation that the big immigrant influx was supposed to resolve. 

Meanwhile the chronic festering conflicts with the Americans has not been helpful.  The "lumber dispute," relating to what are arcanely known as "stumpage fees," remain unresolved, and the Trump Administration has hit Canada with both a market quota and additional import tariffs.  Those tariffs have driven US housing building prices up by roughly $10,000 per house, so the result hits both ways.  Over in Atlantic Canada, the lobster wars continue, with these fights over where exactly the Border is out in the ocean  (which determines which nation's lobstermen can drop their traps overboard, and never mind old traditional lobstering grounds).  Fortunately the actual lobstermen can make their peace with the cousins on the other side of the Border, and have developed informal sharing rights; that is anathema to the bureaucrats. so you get the US sending armed coast guardsmen to intercept Canadian lobster boats and harass the lobstermen, and you get the Canadian Navy sending these men out to some totally remote island that is utterly uninteresting to anybody, to go plant some flag and claim sovereignty  (and then the Americans, not to be outdone, run out and plant their own).  It is totally immature stuff, but of such are bureaucrats molded. 

Ontario likely could have even absorbed the migrants if they had selected them from the Commonwealth Countries, the historical drawing card into Canada, and even Americans, another group that shows up there, typically by inter-marriage. But the Feds did not,  with the notable exceptions of drawing from India and Pakistan, which long ago were colonies.  The problem there is that there is this undercurrent of racial animosity towards persons from South Asia, and everyone from there of the Middle East are collectively referred to as "Pakis"  (short for Pakistani, even if you are from say Iran). The Pakis face hiring and housing discrimination, and even insults and attacks (mostly from drunks) on the street, so the integration of migrants into the mainstream economy has been tentative at best. 

The net effects of these trends are a reduction in demand for Alberta gasoline.  Mega-cities develop electrified urban transit, so the gasoline demand is limited.  Meanwhile trucks importing goods from the USA fill up with diesel on the US side, again limiting purchases.  That leaves jetfuel and heating oils, at best a stagnant market.  The Alberta oilpatch attempted to find new customers, and started selling WCS into China, but now that Ottawa has arrested a Chine (woman) executive from the largest Chinese electronic manufacturer of switchgear, there are big conflicts with China.  And the sales of WCS into California refineries seems to be pushed out due to price problems. 

Unless Alberta oil can be forced into the  big refineries in Sarnia and Montreal, and crammed into the Irving operation in St. John, New Brunswick, Alberta faces a sales problem. Can the new "solvents" process for extracting clean bitumen from the oilsands save the day - by providing a one-step sulfur-fee clean oil suitable for shipping bunker C fuel?  If it does, then Alberta can stay in the game.  If not, then the Alberta oil producers will be defaulting on their municipal taxes.  Big problems loom in the oilpatch. 

[Illurion + 894]

I really do not know what to think about Canada anymore.

When i was a child,  i lived at Goose Bay USAF Base in Labrador for 4 years,  and it was so beautiful there.

I have known a number of Canadian transplants to Florida over the years.

I Have watched literally hundreds of Canadian actors on tv all my life.

I Have always had a "brotherly" feeling toward Canada as a country.

 

But,  over the last decade or so,   Canada has changed,  and i do not like what i see.

Frankly,  i feel the same for what has happened in the USA  recently.

 

But,  i feel that the USA is salvageable so to speak.

I have no idea what the Canadians can do to reverse what they have done to themselves,  as they do not seem to realize they are in trouble.

Edited December 30, 2018 by Illurion

[Jan van Eck + 7,558]

12 hours ago, Illurion said:

But,  i feel that the USA is salvageable so to speak.

I have no idea what the Canadians can do to reverse what they have done to themselves,  as they do not seem to realize they are in trouble.

The Canadians realize it just fine.  They now appreciate that they have been badly led by incompetent leaders, at least on the Provincial level.  And that is why they have tossed out the Provincial Liberals to devastating extent in several Provinces, especially in Ontario, where the Liberals went from 126 seats to 5.  How's that for a demolition of a Party? Eh?

The USA is no longer salvageable. The population has become both too stupid and too violent.  Look around you.

[Jan van Eck + 7,558]

On 12/27/2018 at 9:22 PM, Karl V said:

Probably we will see such in maufacturing , too : Very cheap devices from East Asia , and a waiter in a restaurant might earn much more , than a rabotnik at some assembly line .

 

I just bought a set of brake pads at Advance Auto Parts, a full-priced (and convenient) parts retailer in the USA.  I paid $22.  Between the retailer mark-ups and the shipping, you can estimate that at best the Chinese manufacturer received $12.  There are four pads to the set, plus the rub clips.   Each pad has a metal plate to which the abrasive is glued.  The friction material had to be molded in a press, then treated in an oven.  All for $3.  You shudder to think what the worker in that plant was paid.  Not much. 

Edited December 30, 2018 by Jan van Eck

[Dan Warnick + 6,100]

1 hour ago, Jan van Eck said:

The Canadians realize it just fine.  They now appreciate that they have been badly led by incompetent leaders, at least on the Provincial level.  And that is why they have tossed out the Provincial Liberals to devastating extent in several Provinces, especially in Ontario, where the Liberals went from 126 seats to 5.  How's that for a demolition of a Party? Eh?

The USA is no longer salvageable. The population has become both too stupid and too violent.  Look around you.

Now, Jan.  That does not gel with your normal optimistic view of our fair country.  Is that comment directed more locally, or am I missing something?

[Dan Warnick + 6,100]

1 hour ago, Jan van Eck said:

I just bought a set of brake pads at Advance Auto Parts, a full-priced (and convenient) parts retailer in the USA.  I paid $22.  Between the retailer mark-ups and the shipping, you can estimate that at best the Chinese manufacturer received $12.  There are four pads to the set, plus the rub clips.   Each pad has a metal plate to which the abrasive is glued.  The friction material had to be molded in a press, then treated in an oven.  All for $3.  You shudder to think what the worker in that plant was paid.  Not much. 

Workers like these:

China Uai Brake Pad

or these:

LPB - World's Top 5 Brake Pad Manufacturer

Based on what I experienced in China, I'd guess they make about $5/hour or less, but I could be wrong.  The big difference between companies from a worker's perspective could be working and on-site living conditions.

The point has been made many times and by many people, this type of work does not need to come back to American workers (or Canadian,etc.) and if China wants it they can have it.  We need to focus on new high tech, and we need to protect that as best we can.

Edited December 30, 2018 by Dan Warnick

[Jan van Eck + 7,558]

Just now, Dan Warnick said:

Now, Jan.  That does not gel with your normal optimistic view of our fair country.  Is that comment directed more locally, or am I missing something?

No, distinctly not locally, although VT has its problems, mostly with its drug addicts and taxation issues.  But overall, the USA is a violent and dangerous society, with youths carrying handguns in their waistbands, and assaults and shootings commonplace.  And that seems to be getting much worse, for which there are social reasons, but mostly due to the activities of Wall Street, which are at best dimly appreciated. 

To grasp the level of social discord that is now commonplace, I invite you to contemplate the longer-term implications of what is written up in the attached news article:   

https://www.thehour.com/local/article/Milford-mall-closes-early-after-disturbances-13492406.php?utm_source=newsletter&utm_medium=email&utm_campaign=norwalk_dailynewsletter

Now here you have the descriptive of teenage gangs fighting in the shopping malls, with the number of fighters up to 300.   What does this tell you about the level of discord in society? 

Back to wall Street, what Americans do not realize is the extent to which the Street has been looting the country.  You have the spectacle of a small group, numbering no more than 3,000, literally stealing some 22,000,000 homes of ordinary Americans, with the complicit assistance of a myopic judiciary that takes the view, rather Calvinistic to be sure, that since the homeowner did not pay for the house, it should be stripped away, never mind that the party claiming "holder of the note" status only has some photocopy of the note, is not a real lender, has no money at risk, and is a stranger to the transaction.  For those readers outside America (and quite a few inside), the major banks here have each paid $5 Billion in fines and penalties for what is euphemistically termed "mortgage servicer fraud and abuse."  None of the fraudsters have gone to jail.  None have even been arrested.  It is the greatest land-grab on the planet, even surpassing the land-grabs of the Enclosure Laws in old England, centuries ago, where the Lords simply stole the lands of the peasants and pushed them off  (many of which then emigrated to America, especially the Irish peasants). 

When those kinds of numbers are involved, and one group misuses the Court system to steal from another,then the society has lost all faith in fairness and equity, and chaos and violence will ensue.  It all comes down to Presidential Leadership, in the appointment of Attorneys General and US Attorneys, and in the States, to the Governors and the appointments of prosecutors and state regulators, all of which responsibilities have been dramatically abandoned, in the face of Wall Street money.  

With that pattern and practice firmly entrenched, I see no resolution within the current framework of the USA, and eventually it either erupts in large-scale random violence, as it has in both Argentina and Brasil, or the country breaks up - or both.  

[Dan Warnick + 6,100]

5 minutes ago, Jan van Eck said:

No, distinctly not locally, although VT has its problems, mostly with its drug addicts and taxation issues.  But overall, the USA is a violent and dangerous society, with youths carrying handguns in their waistbands, and assaults and shootings commonplace.  And that seems to be getting much worse, for which there are social reasons, but mostly due to the activities of Wall Street, which are at best dimly appreciated. 

To grasp the level of social discord that is now commonplace, I invite you to contemplate the longer-term implications of what is written up in the attached news article:   

https://www.thehour.com/local/article/Milford-mall-closes-early-after-disturbances-13492406.php?utm_source=newsletter&utm_medium=email&utm_campaign=norwalk_dailynewsletter

Now here you have the descriptive of teenage gangs fighting in the shopping malls, with the number of fighters up to 300.   What does this tell you about the level of discord in society? 

Back to wall Street, what Americans do not realize is the extent to which the Street has been looting the country.  You have the spectacle of a small group, numbering no more than 3,000, literally stealing some 22,000,000 homes of ordinary Americans, with the complicit assistance of a myopic judiciary that takes the view, rather Calvinistic to be sure, that since the homeowner did not pay for the house, it should be stripped away, never mind that the party claiming "holder of the note" status only has some photocopy of the note, is not a real lender, has no money at risk, and is a stranger to the transaction.  For those readers outside America (and quite a few inside), the major banks here have each paid $5 Billion in fines and penalties for what is euphemistically termed "mortgage servicer fraud and abuse."  None of the fraudsters have gone to jail.  None have even been arrested.  It is the greatest land-grab on the planet, even surpassing the land-grabs of the Enclosure Laws in old England, centuries ago, where the Lords simply stole the lands of the peasants and pushed them off  (many of which then emigrated to America, especially the Irish peasants). 

When those kinds of numbers are involved, and one group misuses the Court system to steal from another,then the society has lost all faith in fairness and equity, and chaos and violence will ensue.  It all comes down to Presidential Leadership, in the appointment of Attorneys General and US Attorneys, and in the States, to the Governors and the appointments of prosecutors and state regulators, all of which responsibilities have been dramatically abandoned, in the face of Wall Street money.  

With that pattern and practice firmly entrenched, I see no resolution within the current framework of the USA, and eventually it either erupts in large-scale random violence, as it has in both Argentina and Brasil, or the country breaks up - or both.  

Okay, I was alluding to more locally as in some members of this forum, but I see you are actually sharing some of your first hand experience.  Which is good, because too many Americans simply don't get what you just outlined; and it's all true, every bit of what you just outlined is true. 

Good, honest, moral, extremely intelligent leadership is absolutely necessary to fix those types of serious internal problems.  Donald Trump may have some business acumen to address some international imbalance issues, rather primitively at best, but at least attempting to right that ship.  But he does not have the skills, honesty, morals or intelligence to turn around these larger internal issues.  Leadership like that would be the freshest of breaths of fresh air, and is not likely to step forward any time soon.  But I am hopeful, ever hopeful.

Our government repeatedly sides with the thieves of Wall Street at the peril of everyone else.  Basic protections against Wall Street predatory practices have been enacted as far back as the great depression, and were effective to a large degree, and should have only been enhanced since then.  But alas, government has only served to roll back or entirely reverse those protections.  This small group of people you note will not stop, if left to their own devices, until every penny has been drained out of the American people, and the people of the rest of the world if they can figure out how to do it (which they probably have).

Donald Trump talked about draining the swamp, and some people will insist that he has been doing so or is in the process of doing so, but I don't see nearly enough evidence to support those claims.  The task is too big for just one person, especially a person that does not encourage teamwork.  What will it take to turn our government, and thereby business thievery, around and put control back in the hands of the American people?  Full on civil uprising?  

[Jan van Eck + 7,558]

3 minutes ago, Dan Warnick said:

This small group of people you note will not stop, if left to their own devices, until every penny has been drained out of the American people, and the people of the rest of the world if they can figure out how to do it (which they probably have).

Donald Trump talked about draining the swamp, and some people will insist that he has been doing so or is in the process of doing so, but I don't see nearly enough evidence to support those claims.  The task is too big for just one person, especially a person that does not encourage teamwork.  What will it take to turn our government, and thereby business thievery, around and put control back in the hands of the American people?  Full on civil uprising?  

There is no question that the small group will continue unabated.  Just as one small example, Wells Fargo Bank, a big player, has constructed this 150-page "Attorney Foreclosure Manual" for their fraudclosures, in which it instructs foreclosing attorneys to let their internal boiler factory know what documents they need to have fabricated in order to persuade a judge to issue a judgment of foreclosure to Wells Fargo.  The factory then proceeds to manufacture them, and and the hired attorney goes down and files them on the County Land records.  then the attorney brings certified copies, complete with the county clerk authentication stamp, to the Court and invites the judge to impliedly treat the document as an authentic business record, recorded to public notice.  Then, based only on those documents, and despite the protestations of Mr. Average American that he never had any business dealings with Wells Fargo, the Judge grants title in foreclosure to Wells Fargo.  In this manner, the legacy bank simply steals a man's house. 

There are cases in America today where foreclosures were granted to Wall Streeters for mortgages that never existed.  You get some elderly couple that moves to Florida and purchases some modest house for cash.  There never is or was a mortgage loan.  Then some Wall Street operation files suit in foreclosure, shows up with those fabricated papers, and the home is taken away.  The elderly retired couple can go live in a refrigerator shipping carton, a cardboard box, underneath that highway overpass, along with all the other dispossessed in America, by the hundreds of thousands, probably the millions. 

I had a client who built his own house with a construction loan, a really big palace costing about $600,000.  He was a senior pilot, would mount up and fly his 777 around the globe, got paid probably over $185,000.  His $2,300 mortgage loan payment was peanuts to him. He was paying into KeyBank, an Ohio bank that bought out a local bank.  Some moron inside KeyBank decided on his own that the payment cheque which came from an account with his wife's name pre-printed on the cheque was "bank fraud," it could not possibly be the pilot's check  (the wife was not on the mortgage loan).  So the moron, who used to works as some forklift operator before KeyBank hired him for their back office in Lockport, NY, a tiny place with limited labor supply, refuses to post the payments, and the bank sues the pilot in foreclosure!  The pilot shows up in court with all his payment receipts, he had paid every single payment on time.  The judge grants foreclosure anyway and hands his land title to KeyBank.

Now KeyBank sues to evict him and his family, and I get involved.  We stubbornly resisted that Bank, so the bank then sued the pilot's 82-year-old mother claiming she lives in the house and should be held liable for the payments of "rent" for living there!  Never mind that Grandma lived two towns over, which KeyBank knew, as she was a customer there and also had her own mortgage with KeyBank.  That donnybrook ran up a total of $550,000 in Bank legal fees, and finally KeyBank gave up, returned the house title, and walked away.  But it went on until that Bank was bled for $1.2 million.  Now, ask yourself: if the homeowner was anybody else other than that very smart and very well-paid profession airline captain, could they have withstood that bank abuse and fraud?  If the fellow as a carpenter's apprentice?  A truck driver? Of course not.  those people do not have the money, and do not have the skills, to fend off bank lawyers with unlimited funds at their disposal.  They can and do put three or four law firms on a case in order to totally crush the defendant.  

But this is America.  What do you  anticipate the truck driver will do?  I'll tell you: he gets his gun. America is a violent society. The bank fraudsters are hiding behind a phalanx of lawyers, but that facade will crack, and you will see armies of the enraged take to the streets with their guns and start assassinations.  Those gated communities with hired private security are going to be no match, and those people live in a land of illusions.  The end will come, violently.  Those gilets jaunes guys are kittens in comparison to what is coming in America.  Mark my words. 

[Dan Warnick + 6,100]

Oh yes.  Many, many, people already believe the time is nigh, and they are waiting for the right leadership to get them moving.  I have said repeatedly that we should bring back tar and feathering.  Many if not most thought I was making a silly comment, but the modern day "leaders" in government and business will be fortunate, lucky even, if that is the worst that they receive once people have been fully pushed over that thin line that humans work very hard not to stray over.  It is a relatively thin line, but once crossed it will indeed be difficult to put Genie back in the bottle.

[Illurion + 894]

57 minutes ago, Jan van Eck said:

 

Back to wall Street, what Americans do not realize is the extent to which the Street has been looting the country. 

Agreed.

Was in Banking and Finance for over 30 years with half a dozen Fortune 500's before my heart went bad, and i retired.

I was on the technology side of the business.

Was close enough to see how they operate.

Overly inflated salaries, over-benefited, rigged stock options, misrepresented ipo's, etc., god it made me sick watching it.

And it is always up to something.

Everyone talks about bubbles these days.

Nothing in comparison to the coming pension crisis,

 

[Jan van Eck + 7,558]

7 minutes ago, Dan Warnick said:

Oh yes.  Many, many, people already believe the time is nigh, and they are waiting for the right leadership to get them moving.  I have said repeatedly that we should bring back tar and feathering.  Many if not most thought I was making a silly comment, but the modern day "leaders" in government and business will be fortunate, lucky even, if that is the worst that they receive once people have been fully pushed over that thin line that humans work very hard not to stray over.  It is a relatively thin line, but once crossed it will indeed be difficult to put Genie back in the bottle.

It amazes me that civil war has not yet broken out.  The public has been remarkably passive in the face of Wall Street property thefts.  I would send you that Wells Fargo fraud manual, but the file size is too large.  

 

[Dan Warnick + 6,100]

The arrogance!  In black and white and printed up for all to see, yet we don't see.  Oh yes, we live in the "information age", but we are apparently incapable of seeing the information or acting upon it once it is known.  So much "information" that most people have already thrown their hands in the air and given up.

[Jan van Eck + 7,558]

43 minutes ago, Dan Warnick said:

The arrogance!  In black and white and printed up for all to see, yet we don't see.  Oh yes, we live in the "information age", but we are apparently incapable of seeing the information or acting upon it once it is known.  So much "information" that most people have already thrown their hands in the air and given up.

Wells Fargo paid $ 1 billion to federal regulators to settle some claims of mortgage fraud and abuse:

https://www.thehour.com/business/article/Connecticut-to-get-5-2-million-in-Wells-Fargo-13496217.php

But for a bank that large, that is just an ordinary business expense.  Nothing that would shake them from their awful conduct. 

Previously, they paid $ 5 billion.  Has had no discernible effect at all. 

Edited December 30, 2018 by Jan van Eck

[Dan Warnick + 6,100]

I have been watching Wells Fargo for a long time and I will applaud their demise and CEO Tim Sloan is a fantastic candidate for the first tar and feathering to come in the new year (if we're lucky!).

A few examples of Wells Fargo's recent "history":  

THE THREE BIGGEST LIES TOLD BY WELLS FARGO CEO TIM SLOAN DURING TODAY’S SENATE COMMITTEE HEARING

Wells Fargo error caused 545 customers to lose their homes

Wells Fargo Bank To Pay NJ $17M, Cheated Customers For Years: OAG

And they somehow still have something like 70 million customers worldwide!  If I had been their customer I would have gotten away from them years ago.  Why do people stay with them and why do they even, I assume, get new customers?  Are people not paying any attention at all?

[Dan Warnick + 6,100]

@Jan van Eck At the link I provided above about the 545 customers losing their homes due to a Wells Fargo "error":  Even the headline lessens the impact of their "error".  Are you aware of, and can you share with us, what that "error" meant to any one family that was affected?

[Jan van Eck + 7,558]

2 minutes ago, Dan Warnick said:

@Jan van Eck At the link I provided above about the 545 customers losing their homes due to a Wells Fargo "error":  Even the headline lessens the impact of their "error".  Are you aware of, and can you share with us, what that "error" meant to any one family that was affected?

Chaos.  I have a client, a widow with three disabled children.  Her husband was a Fire Captain.  Because he dies of sickness, not a job death, she gets no survivorship other than from social security.  With the house in Probate, Wells Fargo goes and files a foreclosure lawsuit.  The widow was poorly represented by an attorney with no experience in the field and lost due to fraudulent representations by Wells.  The antique Judge simply issued a nonchalant foreclosure. 

Wells then sued her family for ejectment, and I got into the fray.  I removed the suit to the Federal Courts on unfair debt collections practices grounds  (15 USC 1692), and sued Wells back.  Wells immediately filed a withdrawal.  Then Wells sold the property, or rather their claim to the property, to a real-estate broker-agent in California, basically a shark, for $40,000.  Of course, Wells had nothing to sell because they never owned anything, but Wells had fabricated papers and put them on the land records.  Meanwhile, it now turns out that, two years before all this, Wells Fargo had issued a 1099-A to the IRS, stating that the full value of the loan was "abandoned" back to the widow, but conveniently did not tell that tidbit to either the widow or the Court.  So Wells gets a capital loss tax credit for the loan, and the widow gets to pay income tax on the full amount of the mortgage loan in one year  (which is of course impossible), plus Wells attempted to evict her, leaving her with no house but a huge liability to the IRS.  Wells gets to keep the money and go sell the house also. 

The family is destroyed.  They have most of their household furnishings sitting in a storage locker that they can ill afford to pay rent for, at $150/mo., the son is acting out in violence, the older son ended up in jail acting out, an elder daughter has some mediocre job but was depressed and anxious and developed behavior problems and got fired, and Mom is far to stressed out at the prospect of living in some cardboard box to be able to think straight.  I have taken this family under my protective wing, and for the past two years have fended off Wells Fargo in court, and now I will sue WF for $53 million in damages for deceit.  Plus, I will sue the shark buyer in California for engaging in a conspiracy to defraud.  He, as a realty professional, knows perfectly well that WF was engaging in fraud, that is why he was able to "buy" that house for $40,000 - ridiculous.   That 1099-A will sink them all. You cannot declare a capital loss to the IRS and go take the house that you have declared abandoned to the Government, the world does not work that way.  Not when I am through kicking their ass. 

[Dan Warnick + 6,100]

And that is just one family out of 545 known "customers" that got foreclosed on, illegally I might add.  Imagine if that was you or someone in your own family, people.  Do not believe these crooks, any of them.  The amount of money Wells Fargo has to play with is essentially God money, and their employees must be scared to death and probably on many hooks themselves in case they get any bright ideas to expose their employer.  Does it not even bother any Berkshire Hathaway investor that old Warren is one of Wells Fargo's biggest, if not THE biggest, investors?  Incredible.  Or am I missing something about BH's investment?

[Jan van Eck + 7,558]

8 minutes ago, Dan Warnick said:

And that is just one family out of 545 known "customers" that got foreclosed on, illegally I might add.  Imagine if that was you or someone in your own family, people.  Do not believe these crooks, any of them.  The amount of money Wells Fargo has to play with is essentially God money, and their employees must be scared to death and probably on many hooks themselves in case they get any bright ideas to expose their employer.  Does it not even bother any Berkshire Hathaway investor that old Warren is one of Wells Fargo's biggest, if not THE biggest, investors?  Incredible.  Or am I missing something about BH's investment?

You are not missing anything.  Buffett is personally profiting from the miseries laid onto the shoulders of ordinary American working families.  Wells Fargo is a monster, a totally out of control bank, one that should be placed into Federal Receivership and broken up.

It is far more than 545 customers.  That is only from one small sub-segment of servicer error.  The total number for Wells Fargo alone is closer to four million homes so far. A lot more in the pipeline.  

Edited December 30, 2018 by Jan van Eck

[Dan Warnick + 6,100]

4 million homes, for Wells Fargo alone!?!?  Tell us, did you ever pull out your trusty calculator and come up with an estimate of how much pure profit they stand to make on all these scams?

Folks, I don't like the word "regulations" as it applies to doing business in America (or elsewhere, for that matter), but these banks have been, hell, encouraged to act like this.  They are not regulated at all.  Nobody is watching the savings of average, everyday bank customers.  The government institutions that Americans are led to believe are looking out for their (usually) biggest lifetime investment, their home, are not paying attention, nor are they mandated to, or worse.  This also applies to the tools that retirement investment funds are allowed to use.  The risk the banks are taking with people's savings and investments is beyond tolerable, it's criminal!  The banks are allowed by law to invest customer deposits in risky debt and derivative mechanisms that are by themselves un-quantifiable and, get this, untraceable!  Using bank customer deposits on risky bank "investments", history shows, is what ended up in runs on the banks during the Great Depression.  If I recall correctly, back in 2008, bank customers in Spain were not allowed to withdraw their own money, or only allowed to withdraw 50 Euros a week or something like that, NO MATTER HOW MUCH THEY HAD ON DEPOSIT!  This can happen to us in America if banks become insolvent.    How long could you last if that happened to your accounts?  And what would you do if, during that lovely time, along comes Wells Fargo to foreclose on your house due to lack of payment?  Talk about armed incursions and revolt.  What will your neighbors do if they are told they cannot get to their own money?  What will you do?  Get out of debt, don't take on new debt, keep some cash stashed in a safe place, like the United States Bank of Your Mattress.  Rant over, for now.

[CL Trader + 20]

JV

I have been a small residential subdivision developer, highway, heavy, utility builder for 40 years. In 2006 I took out a land development loan from a well  known bank to build a project that would close out with about 22 million in gross sales. All under a 24 month take down agreement contract with a preferred customer of the bank, and an entity of which I was greatly encouraged to contract with.

After 9 months of site development and going in to the first of 12 pre determined closing dates, I was given a notice of demand for full payment of the loan back to the bank. No problems, interest carry built into the loan for 24 months. The nationwide home builder canceled my contract with them, quote..."for near term concern of market conditions not being conducive to a profitable transaction".

In a matter of 30 days.. I was in foreclosure, the property went to public sale, the national builder scooped it up $5000.... yes you read that right.. $5000.  Brought his work forces in and continued to build the project as designed.

I was able to get an injunction to stop the activity, got an appraisal on the present condition at time of sale, realized I had an appraised value in excess of $4 million over the loan balance due to the bank. The well known bank filed an IRS form reflecting that the value of the property was 3.8 million dollars greater the loan balance due to them.  Not only had I lost my equity in a lightning fast legal maneuver, the bank attorneys then sued me  for 100% of the loan balance in U.S. Court.  I counter sued for intent to defraud.

I owned a few low production oil wells, I sold them to raise capital to pay attorney retainer fees. I sold part of my highway construction business to raise more capital a second time. After wrecking my finances, credit, most of my liquidity.... and 3 years of sanity... the bank received an unfavorable determination from the courts, not a final verdict...just an opinion. They abruptly withdrew the complaint. No reason given.

I paid 1.37 times the loan amount in dispute..... in legal fees.. for nothing. Land gone.. profit gone.. and everyone was like... Oh Well.