Tuesday, April 3, 2012

Report: More than 25 percent of foreclosed Detroit homes now razed or on demolition list

DETROIT (AP) — an analysis finds more than a quarter of Detroit homes with loans that failed during the foreclosure crisis in 2006 and 2007 have been razed or are on the demolition list.
The Detroit News reported today that foreclosures are a huge obstacle to the city's revitalization efforts, with properties being stripped of valuable metal and fixtures quickly after owners are evicted.
Amid its population decline, Detroit has struggled with an increasing number of vacant homes. The newspaper reports that foreclosures from 2006 and 2007 alone added 7,600 homes to the demolition list, and an estimated 38,000 homes currently are in some stage of demolition.
Karla Henderson, Detroit's group executive of planning and facilities, said the city is working to find ways to keep people in their homes.

Stockton, Calif., Could Become Nation’s Biggest Municipal Bankruptcy

S ource: Heartland
Stockton, Calif. is quite at home on lists of dubious distinctions.
This Northern California city has been variously listed as the city with the second-highest home-foreclosure rate of a major U.S. metropolis, the second-highest violent crime rate in California, and two times the frontrunner of Forbesmagazine’s “America’s Most Miserable Cities.”
Now Stockton is hoping to avoid its next bleak title, that of biggest municipality in U.S. history to enter bankruptcy.
After Heyday, Payday
Eighty miles east of San Francisco and home to nearly 300,000 people, Stockton has cycled through decades of city-planning booms and crime-ridden busts.
These days many residents are just doing what they can to stay safe and survive. Unemployment in the city tops 16 percent. Foreclosures are at an all-time high. Homeless shelters are out of beds. The police force has shrunk 25 percent and this year’s homicide total may surpass last year’s record high of 58.
In the early 2000s, after years of decline, Stockton began pouring money into revitalization projects. Developers built residential subdivisions, a theater complex, sports arena, waterfront walkway and marina.
City coffers bulged on the resulting property tax increases, and city employee contracts ballooned. One month of city employment meant eligibility for full retiree health care. Today, the city’s long-term health care liability totals more than $400 million. There are 94 pensions each worth at least $100,000 annually.
“Stockton overcommitted to long-term obligations that even under the best of times the city could not afford. So if there was not a recession, the city would have been having the conversation we’re having in four or five years,” said City Manager Bob Deis in a recent Time magazine interview.
Some Debt in Default
Stockton now faces up to a $38 million gap in its $165 million operating budget and has already defaulted on about $2 million in debt payments through June.
On March 27 Moody’s Investors Service downgraded Stockton’s pension obligation bonds from B1 to B3 and the 2006 lease revenue refunding bonds from B2 to Caa1, considered highly-speculative and with substantial risk. All of Stockton’s long-term ratings remain under review for further downgrades.
In short, the city is losing ground in the fight to pay back what it owes.
City leaders on March 27 announced Ralph R. Mabey, the federal mediator in the Lehman Bros. bankruptcy, the largest in U.S. history, will lead mediation with creditors in an attempt to restructure Stockton’s debt.
Spreading Worry
There is fear that if Stockton defaults, other cities may follow suit. Yet the worry may be mislaid.
With the exception of Jefferson County in Alabama, most of the 11 municipal defaults in 2010 and 2011 (18 total since the recession started in 2008) were small cities struggling to maintain general services. Those isolated instances—out of about 9,700 rated cities and a $3.7 trillion market—are too small a sample for any sweeping lessons, said Bhu Srinivasan, principal at Munigo, a municipal bond distributor.
“Defaults capture headlines, but it is man bites dog,” he said. “You could go the other way and say in even the deep recession, municipalities are strong and bonds aren’t defaulting.”
Moody’s Vice President-Senior Analyst Merxe Tudela agrees.
“Municipal debt defaults will remain infrequent and isolated events, rather than systemic traumas, despite unprecedented credit pressure,” he said in a March 7 statement.
Still, Stockton’s boom-time expenditures do speak to a mentality in city leaders that some say goes a long way toward damaging a city’s long-term economy.
“Every dollar is sacred and a dollar you put into urban development is not a dollar in the pockets of people who live in the city,” said Wendell Cox, a Heartland policy adviser and urban specialist and demographer. “Cities are not about warming the hearts of architects. It doesn’t do anyone any good to make a pretty city.”
Cox said true success is based on the incomes of people who live and work in a city. Stability takes long-term problem solving in areas like education and business, and creating a tax structure that doesn’t over-promise or rely on volatile income.

Just In Time: When the Trucks Stop, America Will Stop (With Immediate and Catastrophic Consequences)

A new report prepared for congress reveals immediate and catastrophic consequences from an attack that on the nation’s  frail transportation infrastructure.

Very few have considered the complexity involved in the underlying infrastructure that keeps goods, services and commerce flowing. Fewer still have ever spent the time to contemplate the fragility of these systems or the consequences on food, water, health care, the financial system, and the economy if they are interrupted.
A report prepared for legislators and business leaders by the American Trucking Associations highlights just how critical our just-in-time inventory and delivery systems are, and assesses the impact on the general population in the event of an emergency or incident of national significance that disrupts the truck transportation systems which are responsible for carrying some ten billion tons of commodities and supplies across the United States each year.
A shut down of truck operations as a result of elevated threat levels, terrorist attacks, or pandemics would, according to the report, have “a swift and devastating impact on the food, healthcare, transportation, waste removal, retail, manufacturing, and financial sectors.
So too would events such as an EMP attack or a coordinated cyber-attack that could shut down global positioning systems and the computers responsible for inventory control. Another potential scenario that is more likely now than ever before is liquidity problems within the financial system stemming from currency crisis or hyperinflation. All of our just-in-time delivery systems are built upon the unhindered transfer of money and credit, but when credit flow becomes restricted or money becomes worthless, no one will be able to pay for their goods. Likewise, no one will trust the credit worthiness of anyone else. This is exactly the scenario playing out in Greece right now and the consequences on the health care industry in that country have left many without life saving drugs. When there’s no money, no one will be transporting anything.
The effects of a transportation shutdown for any reason would be immediate (in some cases, within hours) and absolutely catastrophic.
Excerpted from the American Truckers Associations report
  • Significant shortages will occur in as little as three days, especially for perishable items following a national emergency and a ban on truck traffic.
  • Consumer fear and panic will exacerbate shortages. News of a truck stoppage—whether on the local level, state or regional level, or nationwide—will spur hoarding and drastic increases in consumer purchases of essential goods. Shortages will materialize quickly and could lead to civil unrest. (We’re seeing this in the UK right now)
  • Supplies of clean drinking water will run dry in two to four weeks. For safety and security reasons, most water supply plants maintain a larger inventory of supplies than the typical business. However, the amount of chemical storage varies significantly and is site specific. According to the Chlorine Institute, most water treatment facilities receive chlorine in cylinders that are delivered by motor carriers. On average, trucks deliver purification chemicals to water supply plants every seven to 14 days. Without these chemicals, water cannot be purified and made safe for drinking.
Health Care
  • Without truck transportation, patient care within the truck stoppage zone will be immediately jeopardized. According to Cook, many hospitals have moved to a just-in-time inventory system. In fact, some work from a low-unit-of-measure system.  This means that essential basic supplies, such as syringes and catheters, are not ordered until the supplies are depleted. These systems depend on trucks to deliver needed supplies within hours of order placement. Internal redistribution of supplies in hospitals could forestall a crisis for a short time; however, in a matter of hours, hospitals would be unable to supply critical patient care.
  • If an incident of national significance produces mass injuries, truck transportation is the key to delivering urgently needed medical supplies necessary to save lives.
  • Hospitals and nursing homes will exhaust food supplies in as little as 24 hours
  • Pharmacy stocks of prescription drugs will be depleted quickly. According to the National Association of Chain Drug Stores, most of the nation’s 55,000 drug stores receive daily merchandise deliveries by truck.
  • Service station fuel supplies will start to run out in just one to two days. An average service station requires a delivery every 2.4 days. Based on these statistics, the busiest service stations could run out of fuel within hours of a truck stoppage, with the remaining stations following within one to two days
  • Air, rail and maritime transportation will be disrupted.
  • A fuel shortage will create secondary effects. Without access to automobile travel, people will be unable to get to work causing labor shortages and increased economic damage. Without cars, many people cannot access grocery stores, banks, doctors, and other daily needs. Public bus systems will cease to operate as well, preventing many disabled and elderly people from accessing these necessities. Without fuel, police, fire, rescue and other public service vehicles will be paralyzed, further jeopardizing public safety.
Waste Removal
  • Within days of a truck stoppage, Americans will be literally buried in  garbage with serious health and environmental consequences. Further, without fuel deliveries, many waste processing facilities will be unable to operate equipment such as backhoes and incinerators.
  • Uncollected and deteriorating waste products create rich breeding grounds for microorganisms, insects, and other vermin. Hazardous materials and medical waste will introduce toxins as well as infectious diseases into living environments. Urban areas will, of course, be significantly impacted within just a couple of days.
Retail / Manufacturing / Economy
  • Replenishment of goods will be disrupted. Many of the nation’s leading retailers rely on just-in-time delivery to keep inventory levels as low as possible. Similar to the low-unit-of-measure hospital inventory system, these stores rely on frequent deliveries to replenish basic goods. Often, delivery of a shipment is not triggered until the current inventory is nearly depleted. Without truck deliveries, retailers will be unable to restock goods, including consumer basics such as bottled water, canned goods, and paper products.
  • Consumer behavior during emergencies triples the rate of inventory turn-over.Since many large retail outlets typically keep inventories as lean as possible, problems often arise quickly during truck transportation slowdowns that occur from crises such as hurricanes.
  • Just-in-time manufacturers will shut down assembly lines within hours. Major American manufacturers, ranging from computer manufacturers such as Dell and Compaq to major automakers such as GM and Ford, rely on just-in-time manufacturing. Without truck deliveries, component shortages and manufacturing delays will develop within hours
Financial Sector
  • ATM and branch bank cash resources will be exhausted quicky. In today’s fastpaced, high-technology economy, consumers access cash 24/7 from 370,000 ATMs nationwide. JP Morgan Chase, the nation’s second largest consumer bank, replenishes its 6,600 ATMs via armored truck delivery every two to three days. Given the increase in ATM activity that occurs before and after any type of crisis, ATMs would run out of cash much sooner.
  • Small and medium-size businesses will lose access to cash.
  • Regular bank functions will cease.
While an event that disrupts truck transportation systems may be unlikely, recent history suggests it is fully plausible and the blowback can be devastating. A day after Hurricane Katrina ravaged New Orleans, panicked government officials stopped all transportation flow into the region, forcing hundreds of trucks loaded with emergency supplies like food and water to wait for permission before they could enter the area. As a result, thousands of residents of the city were left without items essential for survival. It took days before truck routes were re-opened and supplies were allowed to flow. Government officials acting on limited information, lack of knowledge and personal politics were responsible for restricting the flow of goods into New Orleans, potentially killing hundreds of people in the process.
What this incident demonstrated  is that when the trucks in America stop, all commerce and delivery stops with it.
Now consider what may happen if the emergency is more widespread, affecting not just a city, but the population of an entire region or the United States in its entirety.
Source: SHTFplan.com

Global Payments: Data breach is contained

Summary: Global Payments, at the center of a Visa and MasterCard security breach, held a call on Monday to say that the data breach suffered has been “contained”.
Global Payments, a third-party payments processor to Visa and MasterCard credit and debit cards, reiterated that while customer data may be at risk, the data breach has been “contained to the best of our ability.” Overall, 1.5 million accounts may have been affected.
Global Payments chairman and chief executive Paul Garcia said that the “diligent work” may take some time, but will complete the ongoing investigation and identify any changes that need to be implemented.
Garcia said the breach is contained and the company will get its record of compliance back with Visa and MasterCard “as soon as possible.” Executives were upbeat about Global Payments’ ability to regain its record of compliance with credit card associations.
The company said it doesn’t believe any fraudulent charges were made using the stolen numbers.
Separately, Global Payments reported third quarter earnings of $57.9 million, or 73 cents a share, on revenue of $533.5 million, up 17 percent from a year ago. Non-GAAP earnings in the third quarter were 83 cents a share. Wall Street was looking for earnings of 84 cents a share.
Global Payments projected 2012 revenue to be $2.15 billion to $2.2 billion. The company expects non-GAAP earnings of $3.50 a share to $3.58 a share. GAAP earnings were $3.10 a share to $3.18 a share.
Charges related to the breach weren’t disclosed because the investigation is ongoing.
Approximately three weeks ago, the breach was discovered. Within hours, law enforcement had been contacted. Garcia described how the company “jumped on this instantly,” and that only a “handful of servers” were affected.
Here’s what happened and when:
On Friday, it was first reported that Global Payments suffered a security breach, where as many 50,000 cardholders may have had their information exposed.
Global Payments processes card payments between merchants and banks, sitting in the ‘middle-ground’ directing where payment data should go.
Brian Krebs, who first reported the breach, initially warned that 10 million cards may be compromised. On Sunday, Global Payments revised down Krebs’ figure as it confirmed as many as 1.5 million Visa and MasterCard accounts may have been compromised by the security breach.
While card numbers may have been downloaded from its systems, no other personal data — such as names, addresses, or Social Security numbers — were accessed.
Both Visa and MasterCard confirmed there was no breach to its own systems.
Visa and MasterCard both sent out non-public alerts to banks to warn of the breach that was thought to have occurred between January 21 and February 25, as Global Payments informed law enforcement andbrought in an independent data security organisation to inspect any damage.
Visa, as a result of the breach, removed Global Payments from its list of approved service providers, but invited it to re-apply once it submits evidence to show its security is “in compliance with Visa’s standards.”
MasterCard said it had not followed Visa’s move, but was awaiting the result of an independent forensic investigation before it made any decision.
Associated Press reported that a technical problem affected the Visa network for 45 minutes on Sunday evening, which resulted in users unable to use their credit and debit cards. Visa confirmed this was not as a result of the recent security breach.
While the reputation of Visa and MasterCard stands in jeopardy, Global Payments lies in ruins. But Jefferies analyst Jason Kupferberg said that the processor can weather the storm.
The processor has $300–400 million in unrestricted cash, which could pay for the damage left by the breach, compared to figures by the 2009 Heartland data breach, in which 130 million accounts ran compromised. Analysts weighed in almost immediately after the breach with their opinions.

The Rise and Fall of the Fiat Monetary System

Ron Paul will not sell the American people out or take bribe

BRICs Bank To Rival World Bank and IMF and Challenge Dollar Dominance

Gold’s London AM fix this morning was USD 1,664.00, EUR 1,246.16, and GBP 1,037.54 per ounce.
Friday's AM fix was USD 1,655.75, EUR 1,245.86 and GBP 1,041.22 per ounce.

GoldCore Gold Bullion Cross Currency Table – (Bloomberg)

Outgoing President of the World Bank, Robert Zoellick, after just three days ago dismissing the idea of a BRICs created, new global multi lateral bank, has come around and endorsed a BRICs bank in an interview with the FT.

He acknowledged that a BRICs bank was being created and said that the World Bank supported such a bank. He said that not having Russia and China as part of "the World Bank system" would be a “mistake of historic proportions”.

GoldCore Gold Bullion
BRICS leaders, from left, Brazil’s President Dilma Rousseff, Russian President Dmitry Medvedev, Indian Prime Minister Manmohan Singh, Chinese President Hu Jintao and South African President Jacob Zuma. Photo: AP

The five countries now account for nearly 28% of the global economy, a figure that is expected to continue to grow.

Left unsaid so far is the possibility that one of the BRICs or the BRICs in unison might peg the value of their respective currencies to the ultimate store of value and money - gold.

Global diversification and owning the hard monetary asset of gold has never been more important.

Silver is trading at $32.41/oz, €24.29/oz and £20.21/oz.

Platinum is trading at $1,634.50/oz, palladium at $651.96/oz and rhodium at $1,350/oz.
Please click here to read the rest of GoldCore’s Market Update.

Americans squeezed as inflation filters into the cost of daily life. The uncertain employment market of low wage work.

There are unintended consequences when policy aims at depreciating a currency in favor of bolstering an ailing banking system.  The Federal Reserve has been on a multi-decade mission to lower the value of the US dollar.  The primary purpose of this mission is to inflate banks into solvency as they try to work their way out of the massive financial crisis.  The amount of troubled real estate loans is still impressive when we look at the temporary sanctuary being provided by the Federal Reserve on their overloaded balance sheet.  This luxury is not afforded to your common household and consequently many Americans are now facing higher and higher costs in items like energy even though demand is slightly lower.  This occurs for a variety of reasons but a main driver is the declining purchasing power of the US dollar.  This permeates over into the employment market that is largely being driven by lower wage positions.  Inflation is creeping back into the economy.

Consumer inflation now edging back up
Since our economy is fantastically debt based and debt is the medium of exchange, more debt is likely to produce higher prices given the same amount of goods.  Typically this equation is leveled at the money supply but our system is one in which debt rules supreme.  While households are in the painful process of deleveraging, debt has increased overall because of banking bailouts but also government spending.  For this, we are seeing consumer inflation pickup:
consumer inflation
The inflation rate has been moving up since the crisis hit a trough in 2009.  Americans are facing higher prices in a variety of sectors including healthcare, energy, food, and higher education.  Ironically inflation is hitting in many of the cornerstones of what was once thought to be part of a middle class lifestyle.  The recent push in prices has largely come from the higher prices in energy:
Total energy costs are up 7 percent over the last 12 months while wages have gone stagnant.  Gasoline has seen the largest push up in the last year moving up by 12.6 percent.  Looking at food, the total cost of food has gone up by 3.9 percent over the last 12 months.  Of course much of this is synergistic with the rise in energy given that food is transported and also produced with high levels of energy usage.  The interesting point here is that energy usage overall has not necessarily surged in the US to justify this movement.  This is largely being driven by an overall depreciation in the US dollar:
us dollar
The US dollar has lost over 50 percent of its purchasing power since the 1980s.  It is no coincidence that global goods like food and energy are now more expensive.  This is problematic since Americans are seeing little growth in their wages.  The stagnant wage dilemma has been in effect for well over a decade now.

Impact of low wage employment
Just take a look at some of the top employment sectors in our economy:
employment by sector
The top three employment fields in our country are:
1.  Office and administrative support work
2.  Sales & Related
3.  Food preparation and serving related
In the past, a large portion of our labor force was in good paying manufacturing positions.  Now, the low wage labor force dominates. This is a major driving force for the slow disappearance of the US middle class.  Some of the higher paying positions require high levels of specialization and schooling, certainly in healthcare and technology positions.  These industries however employ a smaller part of the entire labor force as the chart above indicates.
Overall there are many challenges looming on the horizon.  There is definitely a divide in the country where the middle class is shrinking.  Many of the good paying jobs are in what are known as the STEM fields (science, technology, engineering, math) and on the flip side you have many colleges for example catering to fields that are lower paying yet charging absurd fees pushing many students into enormous debt.  The for-profits in many cases produce degrees that yield very little return once students graduate.
This is why another interesting chart to examine is the number of positions opening up and those being hired:
job openings job hires
While job opening have certainly moved higher up, I find it interesting that actual hires have been rather steady since the recession ended.  Could it be that many of the jobs in demand are simply not finding the needed skills in the current market?  This trend is likely to accelerate and many on the edge of the middle class are being pushed off into the working poor.  46,000,000 Americans are on food stamps even though we are years into a recovery.  Since many of these people have less disposable income and a larger portion of their money goes to food and energy, the massive inflation in these two segments of our economy are going to hit them much deeper.  If you look at banking profits thanks to generous bailouts by the Federal Reserve and subsequent depreciation of the dollar impacting the working poor, you should get a better sense which segment of our population is taking the brunt of this economic restructuring.

Ron Paul Brilliantly Answers Student Loan Question

Servers made to pay 'house charge' from tips

A restaurant server has filed a complaint with B.C.'s Employment Standards Branch against a high profile Vancouver restaurant group because management required her to hand over her tips at the end of shifts.
"The last night I worked I made $320 in cash tips, and I walked out of the restaurant with not a penny in my pocket," says Charlotte Zesati.
"The manager wouldn't let me go until I put [some cash from tips] in the envelope … faced this camera in the office and put it in the safe."
Zesati says that happened after she'd already cashed out and split some of her tips with the bartender and busser. She had given each of them cash equal to one per cent of her sales.
She says she was told the money she had to put in the safe would go to "the house."
"I asked [the manager] who was getting this ... I was pushed aside, told, this is how much you have to pay."
Zesati is a single mother who recently moved to Vancouver from California. She worked briefly at Black + Blue, a high-end steakhouse owned by the Glowbal Group, which runs seven prominent Vancouver restaurants, with the others being Glowbal Grill, Sanafir, Coast, Italian Kitchen, Trattoria and Society.

Server got less than half

Records show a manager later gave her $124 back — for her $320 night — which is less than half of what customers tipped her.
"I have never experienced that. And I have been working in this industry for over 20 years now," said Zesati. "For me, it's food on my daughter's plate. For me, it's clothes on her back. It's more than, you know, tips."
Zesati says after she quit, she learned all servers had to pay a "house charge," equal to 4.2 per cent of their net sales, on any given night. She said Black + Blue's general manager told her the money is later distributed to other staff, including managers.
To the customer, that means if they leave a $15 tip on a $100 restaurant bill, $4.20 of that tip goes to "the house," not to the staff member who served them.

"[The general manager] said the day before they did $47,000 in sales. If you times that by four per cent you've got yourself about $2,000 in one day going into that kitty," Zesati said.
After she complained to the owners, the Glowbal Group mailed her a cheque for the full amount she had handed over. "They actually just as quickly as possible sent a cheque in the mail," she said.
CBC News took a hidden camera into Black + Blue, and asked staff, as any customer might, what happens to the tips. We were also told servers must pay a percentage of their sales — out of their tips — to "the house."
Glowbal beverage manager Chris Ballas told us: "They tip us [the bar] out one per cent. They tip their busser out one per cent, and then 4.2% to be exact goes to the restaurant."
When asked where that money ends up, he said, "That goes to ... the house. Staff parties. Breakages. That kind of stuff. So that's to account for variable costs," he said.
He told us glass breakage costs at Black + Blue are $2,000 a month and "that's where that kind of stuff [tip money] goes."

Described as 'kickback'

Then he added: "It's a kickback. Let's be honest … kickback or grease … or whatever you want to call it … they [servers] have to give the restaurant for the entitlement or the privilege to work within that restaurant."
He told us the practice is industry standard, at least in B.C. "All Glowbal sites. And I'm pretty sure ... I'm pretty safe to say all of Vancouver."
Glowbal Group's high-end steakhouse, Black & Blue, is situated on Vancouver's toney Alberni St.Glowbal Group's high-end steakhouse, Black & Blue, is situated on Vancouver's toney Alberni St. (CBC)CBC News then sent a woman into several other prominent restaurants, posing as a server looking for work, to ask what happens to tips.
At the Keg, Cardero's and Joey's, managers said the money is pooled among staff based on a percentage of sales ranging from 2.5 to 5.5 per cent.
Unlike at Glowbal restaurants, though, we were told the business doesn't oversee the tip pool and managers don't take a cut.
B.C. employment standards law states restaurants can't use tip money for business expenses. Federal tax rules also dictate that if tips are "controlled" by the employer, if management collects and then redistributes the money, it is taxable and EI and CPP must be deducted.

Owner says all goes back to staff

Glowbal Group owner Emad Yacoub insisted none of the cash handed over by servers is kept by him or the company, so he does not report it as income.
"I don't keep a penny of it. We don't keep it … I have never, ever kept one penny of the tips for the restaurant."
He explained a manager, who is also a relative of his, picks up the cash from the restaurant safes every night. The cash manager then divides it up, according to set percentages, and distributes all of it later to hostesses, runners, kitchen staff and floor managers.
"We have one person that handles all the cash for all the restaurants," Yacoub said. "When it gets counted, we have on the record how much was the tip-out and how much goes back to everybody."
Yacoub said the restaurant handles the tip money on behalf of staff, simply to make sure everyone gets their fair share.
"What we do is we just take it and give it to them," he said.
Emad Yacoub says none of the tip money collected from his servers is kept by him or his restaurant.Emad Yacoub says none of the tip money collected from his servers is kept by him or his restaurant. (CBC)We then showed him the hidden camera tape of one of his managers calling the tip practice a "kickback" that goes to "variable costs," like breakage.
"We have never charged any of our staff for breakage or staff parties. We have never kept any of this money. I give it back again to all the staff that work that night," said Yacoub.
"I cannot explain [what the manager said] but I am telling you from the owner of this company … 100 per cent of it goes back to everybody."
Yacoub also insisted since the company doesn't "control" the tips, as tax rules prohibit, a server could refuse to pay the house charge if they wanted to.
"I would tell her, just tell the people you are working with that you don't want to share with them," he said. "I don't decide how it's divided up."

Manager recants

After his boss saw him on the hidden camera tape, Ballas called CBC News and insisted that what he told us when we spoke to him as a customer in the restaurant was all lies. The manager said he was just "talking trash" from behind the bar.
He also said when he realized how much trouble he may have caused the business, he offered to resign, but Yacoub refused to accept the offer.
CBC News then contacted two former high-level Glowbal Group managers, who had invested in the company and worked there for a significant period of time. One left because he had a falling out with Yacoub, and the other just moved on.
They both agreed to talk about the tip system under the condition they would not be named. Both said they had firsthand knowledge that Yacoub "pocketed" some of the money.
The bar manager for Black & Blue, Chris Ballas, talks on hidden camera about the tip procedure at Glowbal.The bar manager for Black & Blue, Chris Ballas, talks on hidden camera about the tip procedure at Glowbal. (CBC)"Emad [Yacoub] does keep it. He would probably keep half," said the disgruntled former manager. "It never touches [restaurant] expenses. It is used as cash."
Both sources told CBC News some of the house charge is given back to floor staff, as Yacoub indicated. However, they said those staffers received set amounts no matter what sales were – like $40 per hostess, per day.
On a good week, the former managers said after staff got their cuts, there was a lot of cash left over.
"Emad's cut is determined by whatever the profit is in tips," said one.
They also said servers had no choice but to pay the house charge. "Even if they were short [on tips] they had to pay out of their own pocket," said one of the ex-managers.
Yacoub said Glowbal Group's restaurant income for 2011 was $26.7 million, so the 4.2 per cent house charge to servers would have been approximately $1.12 million that year.
The disgruntled former manager suggested Yacoub may have kept up to half a million of that, in cash.
"The tip thing is huge. It becomes huge money by the end of the year," he said.

Surplus kept for staff: owner

Yacoub responded to the allegation by explaining that during busy times, any extra cash left in the tip pool – after each employee got their set amount – is kept as cash on reserve. He said it is then drawn on later during slow periods to make sure staff still receive their set amounts.
"This system is set up to create stability and fairness to the all the support staff, regardless of the month or work week, so they know themselves the approximate tips they are to receive per shift worked. This also motivates them to work any shift per week without requesting only the busy shifts," Yacoub said.
B.C. Labour Minister Margaret MacDiarmid says it's illegal for an employer to use tips for business expenses.B.C. Labour Minister Margaret MacDiarmid says it's illegal for an employer to use tips for business expenses. (CBC)He said sometimes the business goes into a deficit to pay staff. For example, he said last week staff at Italian Kitchen received a total of $6,100 from the tip pool, but the average house charge collected from servers each week is $5,000.
Yacoub repeated he doesn't keep any of the tip money, regardless of how good the sales are, and he has records to prove that.
"This system was set up in a way that every single penny that comes in is accounted for and every penny that gets paid out is signed for by all the staff," said Yacoub.
One of the former managers said when he worked for Glowbal, slow times were quite rare. He said, the few times it was slow and there wasn't enough to pay staff out of the tip pool, Yacoub would hand over cash from his pocket to make up the difference.
"He had rolls of cash in his pocket and he always tried to pay for everything with cash," he said.
B.C Minister of Labour Margaret MacDiarmid said Zesati's complaint about Glowbal Group's tipping system will be investigated.
"Tips cannot be used for business expenses," said MacDiarmid. "If there's money owing an employee, they [investigators] will leave no stone unturned to get that money."
"I hope if there's anybody else out there that's suffering through this, that it comes out," said Zesati.

Just How Much Have and Are the International Elitists Stealing from the American People?

We often discuss the wealth of our country and where it has gone and so shall we do so again, starting from the beginning.  In 1913 a group of international banker criminals, working in tandem with a small group of treacherous Congressmen and Senators, set up the Federal Reserve, which was then signed by the international elitist traitor Woodrow Wilson.  By 1933 the government of the United States went bankrupt.  That is, the United States government, not we the people.  We the people were then and still are today filthy rich.
When the government went into receivership, they put up the wealth of our country as collateral for the bankruptcy, which did not represent the tiniest little speck of our wealth.  And as we the people are the absolute owners of the United States and its resources, under Title 50 of the United States Codes, our birth certificates were and are used as the paper representation of the resources we own.

When the birth certificates were put up as collateral, they were leveraged, the same way these thieving banksters leverage one dollar so it can be lent out as thirty.
Now figure in the Federal Reserve and the dollar.  When the first dollar was printed and borrowed from the Federal Reserve it had 3% interest attached to it.  So no matter how many dollars we print and lend to ourselves, it is a mathematical impossibility to pay off the debt.
These fiat debt transfer dollars are then acquired by the international banksters, who turn around and cash them in for real tangible wealth in the form of our natural resources.  Our natural resources belong to we the people and the international bankster gangsters are allowed to take them from us through the receivership, as in the end result the wealth gained from the leveraging of our birth certificates is not being used to pay off any debt, but rather is being funneled back to the banksters through the stock market, where our birth certificates are bought and sold literally every day.
The way I believe it works is like this.  Whenever we as sovereigns wish to purchase anything, under Title 50 and through our Social Security Number, the personal account for our personal estate, and through our signature, the item is paid for in full.  The wealth created through the transaction is then supposed to be put toward paying off the debt.
The problem is when we were born, those who were and are robbing us blind, made us dead on our birth certificates and turned our birth certificates into a non-living corporation in order to tap our personal estates.
I have not been able to study this matter as in depth as I would like, but a man by the name of Rod Class has.  Watch this video and see what your fortune is.
You see the reason you feel like you do not have control over your life is that you have been reduced to the status of a corporation and big corporations naturally lord over small ones, whereas freeman citizens with full rights under our Bill of Rights are far and above any corporation.
The reality is each and every one of us has been born into about $200 million worth of real wealth through our resources as calculated in today’s fiat dollars.  And this is without working or hitting one lick.  This is your inheritance as a US sovereign.  This is how much the international elite are stealing from each and every one of us.
Rod Class and his people have proven this and are working on finding out how these thieves are accessing our personal accounts and keeping us from doing the same.
This is why we must occupy every port in the United States and stop the flow of our natural resources, hence our wealth, out of this country.
We are being treated like the Indians were when the wealth of the United States belonged to them exclusively.  They were put on reservations and left to eat rotten meat and flour with worms in it.  They were called ignorant and lazy and their personal estates were taken over with the excuse being given that they were too stupid to manage their own affairs.  Meanwhile, the international thieves became the powerful monster we now face today.
Our country is still the richest on this planet.  We are wealthy as individuals and we are going to have to fight and win if we want our estates back.  And when we are forced to do so we are not only going to stop the theft we are going to take back that which has been stolen.
Mr. Class has reasoned that if we were all just handed $200 million we would stop working and revert back to the Stone Age.  I disagree.  Some might, but I think most Americans need to work and to create.  And let’s face it, the only real difference would be that the elite would be those that lawfully own the wealth, rather than those who have stolen and are stealing it.
As for all you people out there preaching socialism, tell me, would you rather be a part of a social collective working for room and board, or an individual multi-millionaire actually enjoying your life?
Brothers and sisters, American people of the American race, we are going to reinstate our Republic under our Constitution.  We are going to stop the theft, punish the thieves, and recover our wealth.  And then, we are going to live the rest of our lives with freedom, liberty, justice, and prosperity beyond our wildest dreams.
God bless this Republic, death to the international corporate mafia, we shall prevail.

Six Survival Library Essentials Reviewed

One of the first steps I often suggest to new and budding preppers is to begin putting together a good library of essential reference materials.  Frequently, people new to prepping feel overwhelmed at the amount of knowledge they feel they need to learn all at once.  By acquiring hard copies of reference books, the necessary information can be at their fingertips when it is needed.
It is important that your survival library be in hard copy format, rather than just e-books or documents saved on a hard drive or disk.  During many types of disasters, electricity is one of the first things to go.  When that happens, you’ll be unable to pull up the information you may need at a moment’s notice.
Bug Out! by Scott B. Williams
A decidedly unique approach to the more traditional survival manual, this book is a complete overview of the continental United States.  Williams breaks up the country into several regions and for each one discusses the pros and cons of bugging out to those areas.  He greatly details flora, fauna, climate, and other pertinent information.  Williams then gets even more detailed and recommends specific natural parks and other locations that he feels would be ideal for an individual or family needing to fade a way for a while.
The Doom and Bloom(tm) Survival Medicine Handbok by Joseph Alton, M.D. and Amy Alton, A.R.N.P.
The authors are known throughout the prepping community by their aliases of Dr. Bones and Nurse Amy.  They have taught thousands of people through their various conference appearances as well as their Internet radio shows.  Now, their combined medical knowledge has been distilled into one handy book.  In the 400+ pages, they discuss just about every illness or calamity that may befall someone in a disaster, from broken bones to animal bites, athlete’s foot to seizures.  What I really like about this manual over other “survival medicine” books is they go well beyond just immediate first aid and discuss the long-term recovery of these ailments.  Further, in addition to providing the more traditional medical approaches, they also discuss herbal remedies for those who may not have access to a full pharmacy.
Build the Perfect Survival Kit by John D. McCann
Quite simply, this is THE book you’ll want when it comes to putting together get home bags and other portable emergency kits.  McCann has spent many years making his own kits out of just about anything you can imagine and shares his experience with the reader.  He has specific recommendations on gear as well as some very innovative solutions to common problems.
Emergency Food Storage and Survival Handbook by Peggy Layton