Friday, December 19, 2014

The Tears Of Chairman Mao: More Than $1.3 Trillion In Secret Cash Smuggled Out Of China In The Last 10 Years … Plus! Is Arcadia "Tongjian Town?"

Mao is crying.
(Mod: In case you've been wondering where the dough for those "all cash house buys" in the area has been coming from, here is a report from a news site called Quartz that neatly lays it all out. Apparently much of that money was illegally smuggled here.)

More than $1 trillion in secret cash sneaked out of China in the last 10 years (link) - China’s capital account might be closed—but it’s not that closed. Between 2003 and 2012, $1.3 trillion slipped out of mainland China—more than any other developing country—says a report (link) by Global Financial Integrity (GFI), a financial transparency group. The trends illuminate China’s tricky balancing act of controlling the economy and keeping it liquid.

GFI says the most common way money leaks out in the developing world is through fake trade invoices. The other big culprit is “hot money,” likely due to corruption—which GFI gleans from inconsistencies in balance of payments data.

In China, both activities have picked up since 2009. In fact, $725 billion—more than half of the outflows from the last decade—has left since 2009, just after the Chinese government launched its 4 trillion yuan ($586 billion) stimulus package.

Even after that wound down, the government encouraged investment to boost the economy, prodding its state-run banks to lend. Since loan officers dish out credit to the safest companies—those with political backing—this overwhelmingly benefited government officials and their cronies.

That’s left small private companies so starved for capital that they’ll pay exorbitant rates for shadow-market loans, which a lot of China’s sketchy trade invoicing outflows likely sneaked back in to speculate on shadow finance and profit from the appreciating yuan. Corrupt officials, meanwhile, shifted their ill-gotten gains into overseas real estate and garages full of Bentleys.

Those re-inflows inflate risky debt and had driven up the yuan’s value, threatening export competitiveness. China’s leaders were not exactly happy about this, and in March its central bank drove down the value of the currency in order to discourage hot money speculation on the yuan’s appreciation.

China’s policies leave it with few other options. To avoid the economic nosedive that likely would follow if the bad debt got written down, China’s leaders have the banks extending and re-extending loans, hoping to deleverage gradually.

That requires an ever-ballooning supply of money, though. The slowing of China’s trade surplus and foreign direct investment inflows leaves the financial system dependent on new sources of money—like speculative inflows from fake trade invoicing.

 The danger of this is apparent already. For example, the government’s June 2013 crackdown on fake trade invoicing caused a seize-up in liquidity, pushing banks close to a meltdown.

This precarious relationship with liquidity might partially explain “Operation Fox Hunt,” the crackdown on Chinese government officials who have fled China or transferred assets to family members abroad. Already, 329 “foxes” have been snagged, and the government just demoted around 1,000 officials (paywall) whose relatives abroad refuse to return to China.

Xi’s so-called anti-corruption crusade has boosted his populist bona fides with the people. But there’s likely more behind it than just public relations. With China’s real estate market in the doldrums, its economy slowing, and its leader cracking down, the “foxes” have more reason than ever to sneak their spoils overseas. Making sure they don’t isn’t just a matter of legality, but of protecting China’s financial system from freezing up once again.

Anti-Corruption Show Trials In China Take A Salacious Turn

(Mod: According to the following report in yesterday's Los Angeles Times, these "foxes" and their "flies" are apparently some quite frisky and frolicsome Communists. What would Mao think?)

At Chinese brothel, a room for Communist Party cadre fantasies (link): From offering Japanese schoolgirl uniforms to creating rooms tricked out with traditional Chinese wedding decor, China’s underground sex industry is always trying to keep up to date with its clients’ fantasies.

So perhaps it’s no surprise that one brothel decided to create rooms outfitted with all the trappings of a Communist Party official’s office.

Recent anti-graft crackdowns have seen tens of thousands of cadres busted for corruption, and along with fiscal crimes many have been accused by party disciplinarians of moral failings, including an offense that translates as “having multiple sex partners.”

When police recently raided a brothel in Yibin, in southwestern China’s Sichuan province, they found rooms that looked exactly like government officials' offices, with role-play services available, the Shanghai-based Paper reported Thursday. The brothel providing such rooms was shut down by the police, and 40 people were arrested.

Photographs of the brothel’s “office” room showed a red wood desk and a big leather chair. With both a Communist Party and a Chinese national flag standing on the desk, the chambers bore an uncomfortable resemblance to President Xi Jinping’s office. The public got its first look at Xi’s office when he delivered a New Year’s speech on state-run China Central Television at the beginning of 2014.

The Chinese phrase tongjian, which means having an extramarital sexual relationship, has appeared in the Chinese press quite frequently of late. Although there’s no law in China against having an affair while married, internal Communist Party regulations prohibit officials from having such relationships.

Top-level “tigers,” like former national security czar Zhou Yongkang and rising political star Bo Xilai, have been accused of tongjian, as have countless “flies” -- grass-roots-level officials in small cities and counties. Women aren’t exempt, either: Two female officials were sacked in Shanxi province in late November, and extramarital relationships were among the misconduct charges leveled against them.

Prostitution is illegal in China, and those who operate underground brothels typically pay bribes to local officials or police to keep their businesses running. So perhaps “the office” was simply an attempt to better serve local cadres who may have hesitated to pursue tongjian in their real offices.

Some of those who read about the Chinese brothel online praised the operator’s creativity.

“The product manager has succeeded!” wrote one Weibo user from Shanghai. Said another from Zhejiang province: “Most of their clients are officials, right? This setting can definitely help those customers feel right at home.

(Mod: So if "tongjian" means "having an extramarital sexual relationship," and Arcadia is "The Mistress City of California," does that make our neighbor down the hill Tongjian Town? The shocking answer to that one could very well be "Yes!")

http://sierramadretattler.blogspot.com

55 comments:

  1. Stone Gate will have to be renamed the Tongjian Hills.

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  2. Are decadent and utterly tasteless billionaires fleeing to the so-called Chinese Beverly Hills in Arcadia to be considered an oppressed people?

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    1. Give is your ridiculously wealthy, your Ferrari drivers, your tired and hungry yearning for the comfort of an agreeable mistress ...

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    2. Are there disagreeable mistresses? Seems to me that would make them unemployed.

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    3. It depends on what you're looking for.

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    4. Talk about slave labor.

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  3. Unfortunately, there is not enough room nor opportunities in Arcadia and that's where Sierra Madre comes in as its adjacent neighbor. Its happening right before our eyes. Look at the Stonehouse developments, One Carter, Camillo, Mariposa, Camillo and it goes on and on. Its happening in Sierra Madre and many of us don't even realize where these developers come from, where the money comes from and what they are doing. At this stage its hard to connect the dots because none of us drive all over town and see what is going on. The City knows. Elaine knows. Leticia knows. They all know over at City Hall. They are tearing don't every property they can find whether its with lots splits or just tearing down a smaller home on a large lot to build a McMansion. Do we really want to lose Sierra Madre so that a bunch of corrupt communist officials and their cronies have a place to park their money safe from the impending collapse of a corrupt communist system. Don't blame the Chinese however. Some of them may indeed be corrupt but they aren't stupid. We're the stupid ones that allow this to happen. Our General Plan and Muncipal Code needs to be tightened up to absolutely prevent this. Sure, a few people won't be able to do exactly what they want with their own property but we have an emergency and we need to stop the bleeding. It needs to happen now before it is too late. Its too late for Arcadia. That group Save the Highlands is dreaming if they think they can save their neighborhoods. That train left the station long ago. Its not too late for Sierra Madre, but if we don't take extraordinary action soon, it will be too late.

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    1. I wish the forecast for Save the Highlands wasn't so grim, but I think I agree. They'd have to get the Arcadia City Council to enact moratoriums and zoning and building code changes, and that doesn't seem likely, does it?

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    2. Maybe Save the Highlands can get some help by suing the city.
      In the petition they circulated, it sounded like there might be a protection or two for neighbors in their rules.

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    3. The Arcadia City Council has adopted all of the guidelines of the Arcadia Realtors. Including the one that states building immense crap on your lot is a sacred freedom. It is all about money. Arcadia's elected officials are in the pockets of billionaire embezzlers.

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    4. There ain't nothing that money can't buy.

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    5. Majority rules in this country. Save the Highlands is doomed because they don't have the political power to enact the changes they want. A majority of the people in Arcadia now want their city to change and they will elect City Council members who support the demolition fo older homes. Sierra Madre will be doomed if that same demographic change occurs in which the new folks don't get about our heritage or our architecture because they didn't grow up with it and want big, garrish homes. Its simply a culture clash and the majority will prevail unless the majority is stupid and allows candidates to be elected to office who support the destruction of our city.

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    6. Empty houses don't count as people.

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  4. I really appreciate the Tattler shining a spotlight on such an important issue. We're not talking about mild changes here. We are talking about a sudden and radical transformation to cities in the San Gabriel Valley where most of us grew up and lived all of our lives. We are also not just affected by the tearing down of houses and the buiilding of garrish McMansions in their place. You also have to face the facts that the new group of Chinese are not really assimilating but creating a subculture in which you will see Chinese businesses, Chinese restaurants and everything that goes along with a such a massive demographic shift. For example, realtors who are selling houses now will soon lose their marketshare as the pool of potential clients shrinks because Chinese usually use other Chinese for various reasons, not the least of which is a language barrier. Maybe the owner of Casa del Rey in Sierra Madre will soon have to shutter his restaurant like he did the ones in Arcadia and Temple City because no one eats Mexican food any more as he had said in the newspaper article announing the closing of his flagship location in Temple City. There are all sorts of consequences here that go well beyond the tearing down of homes. Sure we need to follow the money but also immigrants need to assimillate into the areas they move to and not try to change it into becoming like the country they left.

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    1. No one eats Mexican food any more (RIGHT) maybe the food like the one in Sierra Madre is just not that good.

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    2. Then place is usually packed. I have no idea what you guys are talking about.

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    3. The place may be packed now. But their restaurants in Arcadia and Temple City used to be packed also until you had the displacement of the people who eat Mexican food in those two cities. Don't take my word for it, google the article in the Star News in which the owner of Casa del Rey explained the reasons for the closing of their other locations. Its not going to happen overnight. But it will happen if Sierra Madre turns into Arcadia and Temple City. I'm not blaming anyone. I'm just stating the consequences of one of the largest and fastest demographic changes that the United States has ever seen. When you have probably 200 million mainland Chinese who want to come to the San Gabriel Valley and you don't think its going to change the equation, your living in la la land. We just made our visa program for Chinese much more attractive with a 10 year period. Its just a numbers game. Let's take South Pasadena for example. About 100 homes are sold there each year. If 80% of those homes are now being bought by Chinese buyers and the population of South Pasadena is say 12,000 people, it is very easy to project how many years it will take until you have a different majority in power. If that majority likes to tear down older homes to build McMansions, well, let's just say, your quint little town is going to undergo some changes.

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    4. I've eaten at all of the Casa del Rey locations over the years. The reason for their demise is, in my opinion, because their Mexican food is terrible. A little like what a Midwesterner would do with velveeta cheese and corn meal. Some people like it, but it's not Mexican. Come to think of it, maybe that's why they like it.

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    5. I go to many Mexican restaurants , at least 2 times a week , but not in town , I have tried it afew times .
      It does not make my short list (or long list). Maybe it is so crowded because they shut down thier other locations so the people who liked them have no other place to go . Pacos seems to be doing ok in Arcadia and there are many others

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  5. Anybody can buy a house here. What you can't do is build an immense cement castle that looks like something at a graveyard that you would put bodies in.

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  6. Leave the Chinese alone you jackals!!!!! They bring restaurants, and laundries, and excellent massages to the area. If you jackals run them and their $$$$ off, who will do these jobs???? Damn jackals will ruin all that is good. Quit nipping!!

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    1. Good morning Jackal :) Haven't heard from you in a while - at least, in this persona. How have you been?

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    2. It's the Christmas Jackal. He is always a bit festive this time of year.

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    3. Ho! Ho! Ho! Nip! Nip! Nip!

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    4. I am fine thankyou... I am around plenty but the anti-jackal cabal that runs this forum does not post my thoughts... you Jackal! Let me be and let my posts be free and flowing with a purity of essence you damn jackals! And to the massages, yes, two spots: behind the Buc in the green van and at the Monastery gates every thursday. Same van. Now leave me be you jackals and let me get my relaxing massage by the new Chinese influx. Jackals!!!!!!!!!

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    5. Massages are only $29, or so says the Star-news ads.

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    6. That's just to get you through the door.

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  7. Opium dens are coming!

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    1. That should calm people's nerves.

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    2. Or we could continue losing the war against drugs.

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    3. It will make the noodles taste better.

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  8. "War on drugs" is a yoke.

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  9. There is a near term/ long term problem with this transformation going on in Arcadia,. The new residents, (a) Don't live here. Most of the sold homes are dark and no one is occupying. (b) The school enrollment is dropping! Soon the famed Arcadia schools will have to look to the neighboring cities to find kids to fill their class rooms. This has already started. The kind of people who can pay a few millions for a 7000 sq. ft home are not buying the house for the sake of the schools or do they have kids in need of schools. These new homes are not meant for normal families. Sierra Madre is next. The signs of the spill over is already there. Wake up!

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    1. Here is the line in the sand. If the City Council votes to allow CETT to build at One Carter, then we have a City Council that favors Arcadia-style development. There shouldn't be any doubt about that. The City Councils that delayed the General Plan for 4 years set us up for this. Now the moment of truth is here.

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    2. Unfortunately it may be too late to stop CETT, the current City Council may not have the power. We do need to fight to stop other developments before they get to the Carter One stage of development. For example, make sure the Monastery property is NOT rezoned R-1. ,That, the Council does have power to do.

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    3. Of course CETT can be stopped. All we need is for the City Council to say NO.

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    4. Yes keep the zone like it is and have a gaint school up there

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    5. Would a gaint school be one with Common Core curriculum?

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    6. It gaint gonna happen. Nope. Not as long as I'm around.

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  10. This is all not a joke for people who don't want the town where they grew up to radically change.

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  11. I love Sierra Madre's entertainment options as they have developed over the past several years. We now have a great place to get a martini (Wistaria) with the high brow as well as a place to drink with friends in low places (The Buc).

    What we have lacked is a high end fancy house where a cowboy can sip a bourbon and recieve a nice, hot bath after a long day at the desk. Thankfully the sale of the Pinney House looks like it will fill that void.

    For this and the rapidly rising property values, we own our new neighbors a great debt of thanks.

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    1. If you drink too much of that bourbon you might not end up with the best bath mate. Pardner.

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    2. High end fancy house? The Pinhead?

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    3. I'll buy my bourbon at Happy's and sit in my own bathtub, thank you very much.

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    4. 12:43, your comment is gratuitous and unnecessary. Each guest at the Pinney will get to choose between the chicken and the goat. Both are fed only organic feed and are most agreeable to know.

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    5. i was thinking more along the lines of choosing between brunette and darker brunette.

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    6. Goat have two color.

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    7. Amen my brother

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  12. Here is another fun fact.

    The wife tells me that the new, extremely large, tasteless beast of an intermidate school that the district is building will feature a chinese emersion program. That tells you what the district is thinking about the future. Put simply, it does not include the people who fought so hard to get the beast built. and it certainly does not include we mexicans who rightfully own this land.

    Personally, I think it's time to accept the fact that these nice immigrants are going to put lots of money into your pocket as you move to a lovely retirement town. If you are smart that town will be in another state that will not take a full 10% out of every dollar over $50k a year.

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    1. Another sad fact if the influx of mistress homes and/or empty homes is lack of the volunteers. I'm figuring an expensive mistress ain't gonna volunteer for squat. Or would that be Jack squat? The Tattler gets me so confused

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    2. The Tattler is typed very slowly. You just need to try and keep up.

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  13. The grammar lady looks like a young Debby Reynolds.

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    1. She is an important addition to this blog.

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