The number of California homes lost to foreclosure in the first quarter surged 327% from year-ago levels — reaching an average of more than 500 foreclosures per day.

The Result: 517 foreclosures every day in the first quarter of 2008. The main factor behind this foreclosure surge remains the decline in home values. Additionally, a lot of the ‘loans-gone-wild’ activity happened in late 2005 and 2006 and that’s working its way through the system. The big ‘if’ right now is whether or not the economy is in recession. If it is, the foreclosure problem could spread beyond the current categories of dicey mortgages, and into mainstream home loans.

Greed does terrible things. People going through foreclosure don’t deserve any kind of sympathy. They should’ve read the fine print. Too many people living above their means to impress the guy next door who is also sinking.

Boiler Room: An unflattering term used to describe a fraud scheme in which salespeople are hired to call unsuspecting individuals and push investment opportunities.

“Boiler rooms” that use high-pressure tactics to lure investors to buy stocks have become a worldwide problem, with operations identified in areas as far-flung as southeast Asia and Africa. Trying to close these operations, which commonly cold call potential investors and use fraudulent methods to push overpriced stocks, is a challenge because they can set up shop virtually anywhere and are hard to track.

Boiler rooms, a term that refers to the kind of makeshift offices these operations often use as their base, have been a focus of U.S. authorities for years. They involve brokers who refuse to say anything negative about the stocks they push and make baseless predictions about how much the shares are likely to jump.

One problem in monitoring the schemes is that the deceptive brokerages may hold themselves out as legitimate firms that are set up in one place but in fact are operating out of another locale. Southeast Asia and Africa are two regions where such activities have been identified, as well as in parts of Europe such as the UK and Spain.

International Organization of Securities Commissions (IOSCO), an umbrella organization for the world’s securities regulators, whose group promotes international cooperation among securities regulators, is pressing roughly half of its more than 100 member countries that have not yet signed a 2002 memorandum of understanding on sharing information. Most countries in the larger financial markets, including the United States, the UK, France, Germany, Japan and Australia, have signed the memorandum.

Check Out Their Company’s Reputation 

A federal court handed down indictments against 14 moving company employees for extorting money from customers. Allegedly, they would sucker people in with low estimates, then ask for much more money on delivery, and not release the goods until the price was paid. Of all the moving company complaints we receive at The Consumerist, this one is the most common.

It’s always important to check out a moving company’s rep beforehand; ask friends for recommendations, look up their BBB report, and see if they’re talked about on sites like MovingScam.com and MovingSham.com. Don’t just go for whoever is cheapest, a low-price could end up costing you a lot.

…Thanks To This Guy.  Daniel Bouton/Jerome Kerviel Goes Down In History

Société Générale, one of the largest banks in Europe, was thrown into turmoil Thursday after it revealed that a rogue employee had executed a series of “elaborate, fictitious transactions” that cost the company more than $7 billion, the biggest loss ever recorded in the financial industry by a single trader. Daniel Bouton, the Société Générale chairman, said the employee, later identified by other bank employees as Jérôme Kerviel, had confessed to the €4.9 billion fraud.

The bank has started legal proceedings against the employee, whom the governor of the Bank of France, Christian Noyer, said was currently “on the run.” Here’s a list of biggest losses EVER.

Warning To The Bulls

Managers of Government-run Chinese mutual funds keep coming up with the same can’t-miss moneymaking opportunity for Lin Rongshi–and for themselves. The messenger might be a low-level functionary or a trusted middleman. Lin, a private fund manager, said the message sometimes would be delivered in his high-rise office overlooking Shanghai’s financial district or, more discreetly, by mobile phone. “They notify us first, and they would buy a few days later [for the fund], then they would come back to us to split the profit I make from buying at a lower price,” says Lin.

This front-running scheme would net an almost guaranteed haul for Lin and for the state-sector employees. Some others, –insiders all, would profit, too. The only outsiders in the transaction would be the mutual funds’ customers, average Chinese investors who have little idea how routinely their money is abused on the Shanghai and Shenzhen stock exchanges. They come to this man to cheat a fortune from the stock market because he was once an expert at it.

Lin says he made his first $100,000 from a trade made on inside information ten years ago, at age 23. He clocked close to a million dollars by the time he was 25, on insider trading, front-running and stock manipulation in the last Chinese bull market, before losing it all and more in 2001 on his last and biggest play.

Rich shareholders, fund managers, even the top management of listed companies–all have approached Lin in the last year, he says. Chinese investors often suspect manipulation behind the sudden, sharp rises in share prices, but their typical reaction is not outrage. Few stock cheaters get caught, and those who do are rarely jailed. The regulator, the CSRC, China Securities Regulatory Commision, is lacking in staff to hunt down cheats, lacking in legal power to punish them severely and sometimes lacking in political clout to take on some of the well-connected state-owned companies it is supposed to watch. Lawsuits are even less effective. The Communist Party, wary of any organized group of malcontents, essentially does not permit class actions.

So, how do you short Chinese stocks when shorting the Chinese mainland market is not allowed? There are several work-arounds, but none are perfect:

• Go through one of China’s Qualified Foreign Institutional Investors. QFII’s—including Citigroup, Goldman Sachs, JP Morgan, Merrill Lynch, HSBC, UBS and several dozen others—are allowed to buy A shares on the Shanghai and Shenzhen exchanges, the playground of domestic Chinese investors. A QFII can offer investors short positions through derivatives. The downside: More middlemen means more transaction costs.
• Short-sell exchange-traded funds that are comprised of Shanghai and Shenzhen A shares. The WISE CSI 300 China Tracker and the iShares FTSE/Xinhua A50 China Tracker are both listed in Hong Kong. The downside: You can’t bet against individual stocks.
• Short-sell a QFII’s closed-end A share fund, like Morgan Stanley’s China A Share Fund. The downside: Even if the value of the fund’s assets falls, that doesn’t mean the fund’s share price also has to fall.
• Bet against Chinese companies listed in Hong Kong. Direxion offers a China Bear 2X Fund and ProFunds Group offers ProShares UltraShort FTSE Xinhua China 25, both betting against the same 25 Hong Kong-traded stocks. If you’re betting on an all-China slump, these funds will rise 2% for every 1% that the 25-company index falls. The downside: Valuations on the Hong Kong “H share” market are not as sky high as on the A share market.
• Wait until China opens its own futures market, which has been expected for some time. The downside: You might miss your chance while you’re waiting. China might not want people betting against their stocks until at least after the Beijing Olympics.

Sell Your Soul For $1.5 Million

With the wealth boom creating unprecedented riches and greater opportunities for gold-digging by both genders, price-tag partnerships and checkbook breakups are increasingly making headlines. Even more surprising, according to a new survey, are the going rates for today’s mercenary unions. Yet even among the workaday (or wannabe) wealthy, marrying for money has become a popular pursuit.  In an infamous personal ad posted on Craigslist this summer, a twentysomething New Yorker who described herself as “spectacularly beautiful” wrote that she was looking for a man who made at least $500,000 a year. You can read her ad here.

According to a survey by Prince & Associates, a Connecticut-based wealth-research firm, the average “price” that men and women demand to marry for money these days is $1.5 million. The survey polled 1,134 people nationwide with incomes ranging between $30,000 to $60,000 (squarely in the median range for nationwide incomes). The survey asked: “How willing are you to marry an average-looking person that you liked, if they had money?”

Fully two-thirds of women and half of the men said they were “very” or “extremely” willing to marry for money. The answers varied by age: Women in their 30s were the most likely to say they would marry for money (74%) while men in their 20s were the least likely (41%).  Women aren’t the only ones with the gold-digging impulse. In the Prince & Associates study, 61% of men in their 40s said they would marry for money. As men get older, they become more comfortable with women being the bread-winners.

The Matrimonial Price Tag Varies By Gender and Age

Asked how much a potential spouse would need to have to be money-marriage material, women in their 20s said $2.5 million. The going rate fell to $1.1 million for women in their 30s, and rose again to $2.2 million for women in their 40s. Men are cheaper! Their asking price overall was $1.2 million, with men in their 20s asking $1 million and men in their 40s asking $1.4 million. Why so low? Men’s numbers are lower because they would feel threatened by women worth several million dollars. The men aren’t going to say they want $10 million, because they wouldn’t be comfortable with a woman who’s worth so much more than they are.

Whatever the case, the prices for both men and women seem surprisingly low, given the new landscape of wealth. While $1 million or $2 million may sound like a lot to people making $30,000, it’s hardly enough to transform someone’s life or make them “rich” by contemporary billionaire standards. No one in the survey quoted a price of more than $3 million. Of course, when the mercenary marriage proves disappointing, there’s always divorce. Among the women in their twenties who said they would marry for money, 71% said they expected to get divorced — the highest of any demographic. Only 27% of men in their 40s expected to divorce.

What An Auction Consumer Should Be Aware Of

Auctioneer Tricks   Let’s say an oil painting drops to $300.00 and several hands shoot up. The correct procedure is for the auctioneer to acknowledge the first bidder he sees or, if he sees several at once, to just pick one and carry on from there. But here’s the trick… A slick and slippery auctioneer will see three hands go up at once (each intending to bid $300.00), and he’ll point quickly to each, “$300.00, now $325.00, now $350.00″ There are two things wrong with this: First, none of those bidders offered a bid any higher than $300.00. Second, those two bids above $300.00 were “phantom bids” to the tune of $50.00. That’s illegal. It’s an offense reportable to the state licensing board.

So why would bidders allow an auctioneer to assign them higher phantom bids that they didn’t make? The auction is so fast-paced and adrenaline-charged that the auctioneer’s sleight-of-hand may not immediately register. They also probably defer to the auctioneer’s authority thinking, “Well, I had my hand in the air.” And most people do not know this little secret: By law, a bidder may retract his or her bid at any time before the auctioneer says “SOLD!”
[ Uniform Commercial Code §2-328(3) ]

At a live auction this means interrupting the auctioneer and bringing the sale to a temporary halt, which is another reason bidders let auctioneers get away with such antics.

Shill Bids As most people know, shill bidding is a scam whereby the auctioneer has one or more cronies pose as bidders to run up the final auction price. At live auctions, shill bidding is so transparent and risky as to be downright stupid. At a live auction you can watch for phantom bids and shill bids by standing in the back of the the crowd and observing both the auctioneer and the bidders simultaneously.

Reserve or Absolute? Per the Uniform Commercial Code [ §2-328(3) ], all auctions are deemed to be with reserve unless stated otherwise. If the advertising doesn’t specify “absolute,” then it’s automatically a reserve auction. This doesn’t necessarily mean that every item will have a minimum price. Most items probably will be sold absolute, even at a reserve price auction. It just means the auctioneer, acting on behalf of the seller, retains the right of refusal.

Buyer Beware As soon as you win something at auction, the staff will immediately hand it over to you. As the auction progresses, piles of merchandise will begin to accumulate around each buyer. Why don’t they just mark these items with your bidder number (like they do with large items) and hold them until you’re ready to leave? Under the arcana of auction law, the sale is consummated when the auctioneer says “SOLD!”, not when you check out and pay. Therefore, the risk of theft or damage immediately passes to you…unless the auction company volunteers to safeguard your purchases. And this is why your auction winnings get dropped in your lap forthwith.

Here are 10 possible reasons you aren’t a millionaire:  

Take a hard look at the list, and do some reflecting. If you want to be a millionaire, it’s well within your power, but you’ll have to face the issues that are currently keeping you from creating that wealth before you will have a chance to call yourself one.

1. You Care What Your Neighbors Think: If you’re competing against them and their material possessions, you’re wasting your hard-earned money on toys to impress them instead of building your wealth and self-esteem.

2. You Aren’t Patient: Until the era of credit cards, it was difficult to spend more than you had. That is not the case today. If you have credit card debt because you couldn’t wait until you had enough money to purchase something in cash, you are making others wealthy while keeping yourself in debt.

3. You Have Bad Habits: Whether it’s smoking, drinking, gambling or some other bad habit, the habit is using up a lot of money that could go toward building wealth. Most people don’t realize that the cost of their bad habits extends far beyond the immediate cost.

4. You Have No Goals: It’s difficult to build wealth if you haven’t taken the time to know what you want. If you haven’t set wealth goals, you aren’t likely to attain them. You need to do more than state, “I want to be a millionaire.” You need to take the time to set saving and investing goals on a yearly basis and come up with a plan for how to achieve those goals.

5. You Haven’t Prepared: Bad things happen to the best of people from time to time, and if you haven’t prepared for such a thing to happen to you through insurance, any wealth that you might have built can be gone in an instant.

6. You Try to Make a Quick Buck: For the vast majority of us, wealth doesn’t come instantly. You may believe that people winning the lottery are a dime a dozen, but the truth is you’re far more likely to get struck by lightning than win the lottery.

7. You Rely on Others to Take Care of Your Money: You believe that others have more knowledge about money matters, and you rely exclusively on their judgment when deciding where you should invest your money. Unfortunately, most people want to make money themselves, and this is their primary objective when they tell you how to invest your money.

8. You Invest in Things You Don’t Understand: Your hear that Bob has made a lot of money doing it, and you want to get in on the gravy train. If Bob really did make money, he did so because he understood how the investment worked. Throwing in your money because someone else has made money without fully understanding how the investment works will keep you from being wealthy.

9. You’re Financially Afraid: You are so scared of risk that you keep all your money in a savings account that is actually losing money when inflation is put into the equation, yet you refuse to move it to a place where higher rates of return are possible because you’re afraid that you will lose money.

10. You Ignore Your Finances: You take the attitude that if you make enough, the finances will take care of themselves. If you currently have debt, it will somehow resolve itself in the future. Unfortunately, it takes planning to become wealthy. It doesn’t magically happen to the vast majority of people.

“Advertising has us chasing cars and clothes, working jobs we hate so we can buy shit we don’t need.” ~From the movie Fight Club

Researchers have found that low self-esteem and materialism are not just a correlation, but also a causal relationship where low self esteem increases materialism, and materialism can also create low self-esteem. They also found that as self esteem increases, materialism decreases. The study primarily focused on how this relationship affects children and adolescents. Researchers found that even a simple gesture to raise self-esteem dramatically decreased materialism, which provides a way to cope with insecurity.  By the time children reach early adolescence, and experience a decline in self-esteem, the stage is set for the use of material possessions as a coping strategy for feelings of low self-worth.

Most of us want more income so we can consume more. Yet as societies become richer, they do not become happier. In fact, the First World has more depression, more alcoholism and more crime than fifty years ago. This paradox is true of Britain, the United States, continental Europe and Japan. Statistically people have more things than they did 50 years ago, but they are actually less happy in several key areas. There is also the considerable cost of what materialism does to the environment. We don’t yet know what final toll that could take in terms of quality of life and overall happiness. What many people don’t understand is that if we want to save the environment then at some level we have to buy and consume less.

The reason people want whatever is currently “hot” is because they believe it will contribute towards their satisfaction and happiness in life. The word “believe” is the key here. People believe that buying more and more things will make them happy, when in fact research has shown time and time again that this simply isn’t the case.

Brett Steenbarger’s Top Ten Reasons Traders Lose Their Discipline

10 ) Environmental distractions and boredom cause a lack of focus;

9 ) Fatigue and mental overload create a loss of concentration;

8 ) Overconfidence follows a string of successes;

7 ) Unwillingness to accept losses, leading to alterations of trade plans after the trade has gone into the red;

6 ) Loss of confidence in one’s trading plan/strategy because it has not been adequately tested and battle-tested;

5 ) Personality traits that lead to impulsivity and low frustration tolerance in stressful situations;

4 ) Situational performance pressures, such as trading slumps and increased personal expenses, that change how traders trade (putting P/L ahead of making good trades);

3 ) Trading positions that are excessive for the account size, created exaggerated P/L swings and emotional reactions;

2 ) Not having a clearly defined trading plan/strategy in the first place;

1 ) Trading a time frame, style, or market that does not match your talents, skills, risk tolerance, and personality.

The Expert Service Problem

A few years ago, an economics graduate student named Henry Schneider drove his dad’s old Subaru station wagon up to Montreal. He had heard about a Canadian consumer interest group that had done undercover investigations of auto-repair shops, and he wanted to try a more academic version of its experiment. He handed the Subaru over to the mechanics working for the group, the Automobile Protection Association, for a complete inspection. They found that it had a small hole in its exhaust pipe, a blown taillight and several other relatively minor problems. Mr. Schneider took careful notes. But he also did something that no ordinary car owner would do. He asked the mechanics to show him how to mess up the car in a couple of serious but obvious ways.

They taught him how to loosen the battery cable (which can prevent a car from starting) and how to suck out coolant (which can leave an engine vulnerable to overheating). Armed with this knowledge, Mr. Schneider drove home to Connecticut and undertook a devilish little test. Schneider is trying to answer a question that has occurred to pretty much all drivers who have ever been given the unsettling news that a car needs more repairs than they had expected: Does it really? Or is the garage just looking to make some extra money off me?

Over the next few months, he took the Subaru to 40 garages, loosening the battery cable and draining some coolant before each visit and telling the same story, “We bought the car recently, and we should have had it looked at before we bought it, but we didn’t. It hasn’t started a few times. Can you check that out?” He also asked for a thorough inspection.

In most of cases, consumers aren’t sophisticated enough to make an independent judgment. That’s why they went to the expert. Economists sometimes refer to this situation as an “expert service problem,” because the same expert who is diagnosing the flaw is the one who will be paid to fix it. Anytime you call a plumber or roofer to your home or anytime you visit a doctor or dentist, you’re at risk of having an expert service problem.

Schneider’s results: Only 27 of the 40 garages did mechanics tell Mr. Schneider that he had a disconnected battery cable, the very problem to which he had pointed them by saying his car didn’t always start. Only 11 mentioned the low coolant, a problem that can ruin a car’s engine. 10 of the garages, meanwhile, recommended costly repairs that were plainly unnecessary, like replacing the starter motor or the battery. In all, only about 20% of the garages deserved a passing grade.

The Big Question: How can you be sure you’re not getting swindled? For an expensive repair, a second opinion makes sense, but it will be hard to know which garage to believe. Schneider noticed no performance difference between garages that talked him through what they found and less forthcoming garages. Until some savvy entrepreneur starts a garage-rating business, the best solution may be the oldest one: asking for a recommendation from someone who is knowledgeable enough to distinguish between good service and bad.

Unhealthy For Dogs? I can only imagine how schizo those dogs must be.

After a $150 initiation fee, and $49.95 in monthly membership fees, and $99.95 in annual maintenance fees—you can rent a dog for $39.95 a day on weekends and $24.95 per day on weekdays. What a steal! So when can I rent a kid? Earlier this year a San Diego-based company started renting man’s best friend for pet lovers who might want to take a dog on a long walk and maybe play a game of fetch, but don’t have the time to own a pet full time. The service caters to people who like dogs but just don’t have the time to take care of them. The customers are happy, but the ASPCA thinks it’s not healthy for the dogs.

Gale Buchwald, senior vice president of the ASPCA Pet Adoption Center and Mobile Clinic Program, said it  violates the human-animal bond. She said dogs that don’t form a strong bond with one family often end up becoming aloof and self destructive. Here’s an alternative: Volunteer to walk dogs every weekend for the local no-kill shelter. I doubt they charge for the privelage of playing with the puppies.

Roughly one-third of lottery winners find themselves in serious financial trouble or bankrupt within five years of turning in their lucky numbers

Many lottery winners end up worse off than they were before they won. “A lot of people who win are financially OK when they win,” says Susan Bradley, a certified financial planner who runs a practice specializing in helping people who come into sudden wealth. Roughly one-third of lottery winners find themselves in serious financial trouble or bankrupt within five years of turning in their lucky numbers. For many people who come into wealth suddenly — whether they win the lottery, receive an insurance settlement or an unexpected inheritance — if they have not acquired good money skills prior to this windfall, often they struggle and make poor choices.

Financial windfall coupled with reckless buying and no concept of money almost always leads to trouble. This is especially true for people who decide to use their winnings to create a new business. Sometimes people just don’t compute the numbers. The best thing to do is to hire someone with expertise handling money.

What typically happens after a lucky lottery winner are contacted by a company that actually takes money away from lottery winners. Soon after winning in April 2004, Lisa Arcand, winner of $1 million, said she was aggressively pursued by Stone Street Capital, a financial services company that offered her a lump sum of money up front in return for all or a portion of her $35,000-a-year lottery proceeds. “They call people who hit the lottery and offer to buy the ticket off you,” she said. “The offer was less than half the cash value. But I sold a piece of it — $15,000 a year, and I got $200,000 up front.” The company’s website makes it clear what the firm is all about. “Free Quote, call 1-800-LUMP-SUM,” the home page states. A link brings visitors to a page that offers a variety of options for turning 20 years of lottery payments into quick cash.

When lottery winners come in to collect their prizes, they are taken into a room called “The Winners’ Circle,” where lottery officials talk to them about how to manage their new-found money. “Sometimes the winners listen, and sometimes they don’t,” says Dan Rosenfeld, spokesman for the Massachusetts State Lottery.  “Our customer service people talk to them about the folks who are going to call them on the phone and will try to get them to sell their ticket.” The primary message from lottery employees to winners is this: Get a lawyer or a certified financial advisor.

Example of What Not To Do
When Arcand won, her enthusiasm got the best of her. One of the first things she did was throw a party for friends and family, and it rapidly spiraled out of control. “I spent $3,000 on a party at Mill City — there were 20 of us and people were ordering $200 bottles of wine,” she said. She didn’t hire a financial planner. “I talked to a few people, but determined that putting money away wasn’t worth it,” she said. She bought a house, went to Florida for vacation, got new furniture and bought a plasma TV, she said. Plus, she got her son into Central Catholic at a cost of $10,000 a year. Then she decided to open the restaurant. You can figure out the rest.

Welcome to your future, California.

Six illegal immigrants were arrested today by U.S. Border Patrol agents at Qualcomm Stadium, after a report that they were stealing food and water meant for evacuees. Gee, who could have seen that coming? San Diego police responded to a call about alleged theft from the evacuation center and encountered six people in a van who didn’t speak English and didn’t have California driver’s licenses. The police officers called the Border Patrol, who arrived at the stadium and made the arrests. The immigrants admitted they were Mexican citizens and that they were stealing.

Other news release from Sign-On San Diego, “A woman told San Diego police officers she saw the group load up two pickup trucks and a car with cots and other supplies, leave and then return, said police Sgt. Jesse Cesena.” A clear indicator of having zero values or worth as humans. The first step towards U.S. citizenship is stealing food and water from disaster victims. How about the other 11,999,994 that are stealing our tax dollars?

  “Most dentists consider themselves to be in the business of dentistry rather than the practice of dentistry”

For American dentists, times have never been better. With dentists’ fees rising far faster than inflation and more than 100 million people lacking dental insurance, the percentage of Americans with untreated cavities began rising this decade, reversing a half-century trend of improvement in dental health. Previously unreleased figures from the Centers for Disease Control and Prevention show that in 2003 and 2004, the most recent years with data available, 27 percent of children and 29 percent of adults had cavities going untreated.

Many poor and lower-middle-class families do not receive adequate care, in part because most dentists want customers who can pay cash or have private insurance, and they do not accept Medicaid patients. As a result, publicly supported dental clinics have months-long waiting lists even for people who need major surgery for decayed teeth.

Business is booming for most dentists. They are making more money while working shorter hours, on average, even as the nation’s number of dentists, per person, has declined. Partly as a result, dental fees have risen much faster than inflation. In real dollars, the cost of the average dental procedure rose 25% from 1996 to 2004. Dentists’ incomes have grown faster than that of the typical American and the incomes of medical doctors. American dentists in general practice made an average salary of $185,000 in 2004, but today dental surgeons and orthodontists average more than $300,000 annually.

Critics say the association’s plans would do little to solve the basic problem of access to care. Moreover, even in states that have raised Medicaid payments, most dentists still do not accept Medicaid patients. Some dentists do not accept Medicaid patients because they frequently miss appointments, which means lost revenue.