The bubble states economy fed the economy of the non-bubble states.
All that hardwood flooring and new bathroom cabinetry and preassembled housing modules have to come from somewhere. And all the distribution centers and call centers for consumer goods have to be somewhere.
And when they can be sourced or sited to lower-costs states like Tennessee, they are.
Tennessee isn't typically one of the states mentioned when talking about budget shortfalls and they're cutting 5% of their workforce. 5% seems like a big cut to me. Municipalities must be in worse financial shape than is reported.
I see no way out of this mess other than inflating away much of the debt. I guess now the fed will open auction facilities so states can create junk bonds and auction them directly to the fed.
The governor said it is time to act "because realistically we are probably not at the bottom of this yet."
I warned this moment would come a few months ago, but it is coming much sooner than I expected. Here in Fresno, though no politician admits it, we are having the same problem, and I expect a major deficit projection leading to massive cuts in county workforce.
In fact, I predict Fresno CA will be the worst hit, and I predict this not on current data, but simply on the relationship between government hiring and government coziness with the home builders.
The two went together precisely, I mean, exactly. The city and county elected members directly computed the number of government workers they would hire based on the current deals being made with builders, not by need, but by how many make work jobs they could create.
Fresno County, California. Our only salvation is the high prices for agriculture products.
The first step will be selling student loan bonds to the fed followed in short order by State GO's.
At that point we will officially be a third world economy!
The article mentions that Tennessee has a rainy day fund. I know that California doesn't. So in some ways Tennessee is better prepared for this than certain wealthier states.
The fall-off in state sales tax will curtail state-aid to municipalities and lead to increases in local property taxes, hurting the RE market and effectively nullifying anything the fed does to ease mortgage rates
Wait until the realization of Peak Oil begins to dawn on the politicians....while the banker/brokers have been raping and pillaging the country the last decade, the world has run out of conventional oil. Obama sure has his work cut out. Anyone want to guess who he'll appoint as Fed Reserve Chair and Tres Sec?
well we HAD some provisions but "Ah-nold" decided to make the refund of car registrations (fairly high compared to the rest of the country) a platform of his election.....and "poof" he was elected....
Most of the states have constitutional requirements to run balanced budgets, as do many municipalities. They don't have the luxury of running deficits. Well-governed states like Tennessee do have rainy day funds that allow them to temper the downturn in receipts, but even so they have to take prompt action to curtail expenditures when receipts turn down.
Fresno County, California. Our only salvation is the high prices for agriculture products. - Matt
That is certainly the way it used to be but then that was before agribusiness went trans-regional. The windfalls from higher ag prices will not have the local multiplier (~3.5x IIRC) effects they used to have.
Gov. Bredesen is a tax and spender. He just couldn't get enough of the other players on board before the RE economy ran out. It wasn't for lack of trying.
Gov. Bredesen is a tax and spender. He just couldn't get enough of the other players on board before the RE economy ran out. It wasn't for lack of trying.
Seems like politicians only come in two flavors these days. Tax and spenders and borrow and spenders.
Seems like politicians only come in two flavors these days. Tax and spenders and borrow and spenders.
Well those are the only two electable flavors. Lets face it, if your platform is raising taxes and cutting benefits, you might as well ba a NAMBLA member come election night.
To what extent is this caused by a shift by consumers towards spending more on tax exempt necessities and spending less on taxable discretionary items? Are most groceries tax exempt in Tennessee?
Vallejo, the only California city whose council has approved a bankruptcy filing, probably will be a "unique case" in the state because money problems afflicting other cities and counties are smaller and have different causes, Moody's Investors Service said on Thursday.
New York state should create an investment pool for public workers' health benefits, the soaring costs of which the state, counties and cities all must start disclosing, the state comptroller said on Thursday.
"More than one million New Yorkers are counting on these health benefits. The responsible, good government thing to do is to start preparing for the future in order to protect health care benefits," Thomas DiNapoli, the Democratic comptroller, said in a statement.
Speaking of knock-down effects of the housing bust, I had a delivery of cord wood today and the guy told me I was lucky I got it when I did because the price was going up 20%. I figured it was because of increased demand, a lot of people here heat at least partially with wood. But he said, no, it was because he gets the hardwood timber from loggers, who mostly want softwood for the mills to make dimensional lumber. Raw wood prices have plummeted so the loggers aren't logging, and no spin off of hardwood...
This site is too sharp to fall for the political class' age-old BS - as anticipated, the TN "crisis" turns out to be more a political creation than a true economic collapse.
Look at the TN Department of Revenue's own statistics:
If we dig all the way to...page 1...we find out that that state-level tax revenues for March were up over 18% from 06 to 07 - so now we're supposed to hand more wealth over to our kleptocratic leaders because state tax revenues for March have fallen...4%? from 07 to 08?
What a shock! A historic fall!....after a historic rise...what a disaster...
Comparing March 06 revenues to March 08 indicates that our disgustingly corrupt political class is still getting $102 million more than it did just two years ago (an era which we will all recall as being wholly without medical care, police protection, or indoor plumbing - with an average age span of 32 years...).
CR, when you retail the political class' palpable BS you are aiding and abetting them.
This TN "crisis" only exists because the kleptocrats have constructed the political system to always fall into crisis - since they are annually increasing public sector hiring to levels that are not economically sustainable - unless tax rates get increased.
"Technically this is a positive feedback loop, CR. In a negative loop, the feedback tends to make the system more stable."
Adverse positive feedback loop?
Wiki is our friend:
"Positive feedback, sometimes referred to as "cumulative causation", is a feedback loop system in which the system responds to perturbation in the same direction as the perturbation. In contrast, a system that responds to the perturbation in the opposite direction is called a negative feedback system. These concepts were first recognized as broadly applicable by Norbert Wiener in his 1948 work on Cybernetics.
A system in equilibrium in which there is positive feedback to any change in its current state is said to be in an unstable equilibrium, whereas one with negative feedback is said to be in a stable equilibrium.
The end result of a positive feedback is often amplifying and "explosive", i.e. a small perturbation results in big changes. This feedback, in turn, will drive the system further away from its original setpoint, thus amplifying the original perturbation signal, and eventually become explosive because the amplification often grows exponentially (with the first order positive feedback), or even hyperbolically (with the second order positive feedback). Indeed, chemical and nuclear fission based explosives offer an excellent physical demonstration of positive feedback."
In my younger days we studied motor control wiring and were warned about setting up an unloaded series motor. Without the load they exhibit positive feedback, and can become shrapnel in seconds. "Don't try to turn it off," he said, "Run for cover and hit one of the big red buttons." Certainly caught our attention.
Consumer confidence in New York state dropped to record lows in April, according to the latest survey from the Siena Research Institute in Loudonville.
State consumer confidence decreased 1.8 points last month, while the nationÂ’s confidence decreased by 6.9 points. At 55.0, New YorkÂ’s overall consumer confidence is 7.6 points below the nationÂ’s 62.6 confidence level.
From 2006 to 2008 it looks pretty good: up over 13% during the two year period.
Also, the single biggest declining item is the excise tax (business income tax). That was responsible for 45 million of the 38 million decline between 2007 and 2008. If excise tax stayed the same, 2007-2008 would have been up 7 million.
Well, it is true that politicians increase spending, but that is what they do. The issue here is their projections aren't working out as planned. If you look at the document linked above, you'd find that the Realty Transfer and Realty Mortgage privilege tax revenue are off by 15-24%. Sales tax is a bit flat. BTW, TN taxes grocery purchases although now at a lower rate.
Also, this doesn't include the April numbers which the governor indicated were worse than bad.
March 2008
PRIVILEGE \t\t\t\t\t2007\t\t\t2008
10701 Realty Transfer \t10,812,173.11 \t8,205,730.12
10716 Realty Mortgage \t 5,085,011.66 \t4,257,438.70
July 2007-March 2008
PRIVILEGE \t\t\t\t\t2007\t\t\t\t2008
10701 Realty Transfer \t118,264,824.16 \t\t102,790,279.91
10716 Realty Mortgage \t 54,437,208.34 \t\t 46,393,104.73
Can't speak for the others but I'm fighting with customers over price increases... big ones kicked through due to raw material increases... been at it all week. Hard to imagine in this 'deflationary environment'.
Good comment, but I wonder to your point in generalÂ…for example, here in Illinois, especially Chicago/Cook County we have added a bunch of top-heavy unessential patronage jobs. A lot, I am thinking, based on the copious amounts of gravy that was flowing because of increased tax revenue. Could a radical reversal now be in the offering?
Tennessee Moonshine is made from fermented corn mash distilled in a cooker. It derives its name from the term "moonlighter" used in England to describe the night time runners that smuggled brandy from France. After World War I, agricultural prices dropped, so during Prohibition, many American farmers turned to whiskey making to support their families.
A typical mountain still uses a stone furnace for heat, a metal still for fermenting and heating the mash, and barrels for collecting steam and condensing the alcohol. It was located near a mountain stream where cold water could be piped in to condense the steam from the liquor.
50 lbs. cornmeal
200 lbs. sugar 12 oz. yeast
200 gal. water
I've been off benefitting from the high price of oil.
BTW, what took so long for the moonshine comment. It was the first thing that popped into my mind. Time to break out the stills and avoid the revenuers. Hee Haw!
CAS127 said: "If we dig all the way to...page 1...we find out that that state-level tax revenues for March were up over 18% from 06 to 07 - so now we're supposed to hand more wealth over to our kleptocratic leaders because state tax revenues for March have fallen...4%? from 07 to 08?
What a shock! A historic fall!....after a historic rise...what a disaster...
Comparing March 06 revenues to March 08 indicates that our disgustingly corrupt political class is still getting $102 million more than it did just two years ago (an era which we will all recall as being wholly without medical care, police protection, or indoor plumbing - with an average age span of 32 years...).
CR, when you retail the political class' palpable BS you are aiding and abetting them..."
We are not as powerful as we used to be because over the past three decades, the Asian values of our parents’ generation — work hard, study, save, invest, live within your means — have given way to subprime values: “You can have the American dream — a house — with no money down and no payments for two years.”
Sebastian, Do you have one of those defective computers that lacks quotation marks? Really, what is *? I thought it was only a symbol used to tone down typed profanity and indicate a footnote. Wherever you got a schoolin' they teached you some backward stuff (like the definition of "worried"). No wonder you think high credit card debt translates to happy, carefree people just out having a good time.
How can it be that financial wizard Sebastian makes enough money to get a rebate check? With his financial accumen shouldn't he be sitting on a pile of money with the dough just rolling in?
I asked this at 10:30am, but didn't anyone else notice the financial stocks breaking lower with volume? This is the beginning of their next wave down, IMO. SKF to $200 before Nov. 4, 2008.
Interesting Times said: "So ya... us Canadians don't need your stinkin rebate cheques
You know, my wife and I were talking about this the other night. We aren't going to give the money back, of course, but we don't need it, and we certainly don't need it as much as a family who's not as well off.
Oh, well. Thieves get rich, saints get shot and God don't answer prayers a lot.
To what extent is this caused by a shift by consumers towards spending more on tax exempt necessities and spending less on taxable discretionary items? Are most groceries tax exempt in Tennessee?
Good questions. A lot of states are in a pretty tight box on taxation. Property tax hikes here in Washington state are limited by voter initiative. (also in CA, I think.) The state gasoline tax is pennies per gallon, not a percent of cost, so when people cut back on driving, the state gets less gas tax revenue.
Food is sales-tax exempt here, so when food prices rise and people have less to spend on other things, tax revenue takes another hit.
There's also no income tax here, and starting one would require an amendment to the state constitution.
When business activity drops, the state (and some cities) lose again because the gross sales tax on business activity goes down.
When did "work hard, study, save, invest, live within your means" become "Asian values"? They used to be called the Protestant work ethic.
I think Mr. Friedman was baiting you. The MSM version of a troll.
When I scan the names of the local high school honor rolls in our newspaper, it's a bit hard to disagree with Friedman. We don't have a huge Asian population where I live, but you wouldn't know that from reading those honor roll names.
barely, :>)
I ment'd above that the late buying today was ppt to ease tomorrows down day..Or could go up since it's bad news. Where's bizarro!
Bought skf a cple times today, glad I held...or maybe not..
"So $1.28 worth of corn consumed over 12 months to produce $1.09 worth of cattle."
Orange juice sold way under the marginal cost of production for many years until 3 enormous hurricanes hit. But, now, it is back on a path below the marginal cost of production again. Could cattle be like orange juice? Stuck in a bad margin business? The Clintons are the experts at cattle futures, maybe somebody should ask them.
Hey dry- going to Sam's to get me a 60 pound box of Top loin for butchering and freezing this weekend.
Gonna use my stimulus check to eat steak for as long as they hold out. Got a couple of recharged propane cylinders too. Too bad beer doesn't keep as well.
This is going to get fugly real fast.
Just bought a stamp collection (off craigslist to boot!) and told them they would get more if they consigned, but they choose the cash.
They were out in the middle of the East Valley with an Excursion in the driveway. I think I will put these stamps aside for a while, the good ones are European, and I am sure that I can get paid in Euros some day;-}
It was kinda sad to do it, but they also said they had a coin collection that they would be liquidating soon.
Elvis, that only worked when the dollar was a lot stronger than the Brazilian real.
We are the weakest currency of the beef producing countries (well, maybe Argentina, but they manage to be dumber than us)- what I can tell you living in a ranching state is that they were liquidating the herd last year due to rising costs, and that they did not restock heavily this year due to ridiculous feedlot costs.
In other words, thar ain't enough cows out there on the range.
Now, what is going to happen to McD and the other beef pushers when the double hits?
AllenM said: "AllenM writes:
Hey dry- going to Sam's to get me a 60 pound box of Top loin for butchering and freezing this weekend."
I hope I'm not the only one to catch the irony. A survivalist with a grim outlook on the future...yet he's going to spend his check, thereby stimulating the economy, LOL!
Seb, that would be a temporary stimulus, unless you go and unplug my freezer. What makes you think I am a survivalist? I like civilization, it is good and comfy. What is grim is that if I expect that $6 buck a pound steak to go to $12, buying and freezing right now postpones my hedonic adjustment until they might just get around to adjusting my paycheck. In other words, a perfect illustration of smoothing, and there is no net stimulus by the end of the consumption period.
Remember everyone, deer is a perfectly good substitute for cow. As long as deer roam the neighborhoods, the demand for cow will be suppressed. However, when deer stop roaming the neighborhood, hide the dog.
Could cattle be like orange juice? Stuck in a bad margin business?
Not likely for long - it only takes about 12-18 months to raise a steer from feeder calf to fully finished animal ready for slaughter (depending on how small the calf you start with and how big an animal you want to send to slaughter). If they can sell corn for $6/bu they don't have to pump the corn through a cow first - exit the cow biz instead.
Orange tress take a lot longer to grow I believe (how may years from planting to first real harvest?)... Not as easy to pull the trigger there - longer repercussion.
I hope I'm not the only one to catch the irony. A survivalist with a grim outlook on the future...yet he's going to spend his check, thereby stimulating the economy, LOL!
AllenM said: "buying and freezing right now postpones my hedonic adjustment until they might just get around to adjusting my paycheck. In other words, a perfect illustration of smoothing, and there is no net stimulus by the end of the consumption period.
Think it through."
If you're buying now but don't view that as immediate stimulus because you're delaying the consumption, your reasoning is over my head.
In response to CS127 and Sebastian, who pointed out that this March revenue is still above the figure of 2 years ago...
From the Tennessee state government website, here are March total tax revenues from 2002 onward
(I didn't see a year-by-year summary, so I just took March revenues year-by-year):
March '02 = 558M
March '03 = 633M +13.5%
March '04 = 691M +9.25%
March '05 = 720M +4.5%
March '06 = 765M +6.25%
March '07 = 905M +18.25%
March '08 = 867M -4.25%
Yes, you are right that revenue is still very high compared to past years. But the fact remains that this is a significant break in trend, from an average increase of 10% revenue since '03 to a sudden reversal (without any recession to cause such a reversal, right Seb?) of a 4.25% decline in revenues.
Yes, governments do foolishly increase their spending during the boom years. Isn't that exactly the point that CR has been making? The boom times will need to be unwound by reduced spending by governments, as well as households.
AllenM writes:
Seb, when I pull the steaks out of the freezer and eat them, I don't have to go down to the supermarket and pay today's price.
I just caught a major ration of abuse in the previous thread for claiming there was an investment component possible to food purchases. Last night was Top Sirloin 1.2lbs repackaged and frozen Dec '07. I don't generally retain prices but this one had the original label in the ziplock baggie. $2.19/lb.
I've got a admittedly cushy but non-tenured artist-in-residence gig at SUNY: part-time, full benefits...
lucky me...
special meeting called tomorrow with the university president to discuss budget cuts by NY State that could be "very bad, perhaps terrible, if not catastrophic."
Hey RobD, BDL basically banned me for pointing this out in 2005- I wonder if he is ready to eat crow yet, that might be all he can afford given his nothingburger raise from the State of California.
Technically California does have a Rainy Day fund (called the Budget Stabilization Account) which contains a whopping $1.02 billion. Ahnold's budget already plans to draw that down to $0.00
The bubble states economy fed the economy of the non-bubble states.
All that hardwood flooring and new bathroom cabinetry and preassembled housing modules have to come from somewhere. And all the distribution centers and call centers for consumer goods have to be somewhere.
And when they can be sourced or sited to lower-costs states like Tennessee, they are.
Now, it's ending.
Tennessee isn't typically one of the states mentioned when talking about budget shortfalls and they're cutting 5% of their workforce. 5% seems like a big cut to me. Municipalities must be in worse financial shape than is reported.
I see no way out of this mess other than inflating away much of the debt. I guess now the fed will open auction facilities so states can create junk bonds and auction them directly to the fed.
Technically this is a positive feedback loop, CR. In a negative loop, the feedback tends to make the system more stable.
"Technically this is a positive feedback loop, CR. In a negative loop, the feedback tends to make the system more stable."
Adverse positive feedback loop?
It's only the beginning.
The governor said it is time to act "because realistically we are probably not at the bottom of this yet."
I warned this moment would come a few months ago, but it is coming much sooner than I expected. Here in Fresno, though no politician admits it, we are having the same problem, and I expect a major deficit projection leading to massive cuts in county workforce.
In fact, I predict Fresno CA will be the worst hit, and I predict this not on current data, but simply on the relationship between government hiring and government coziness with the home builders.
The two went together precisely, I mean, exactly. The city and county elected members directly computed the number of government workers they would hire based on the current deals being made with builders, not by need, but by how many make work jobs they could create.
Fresno County, California. Our only salvation is the high prices for agriculture products.
When the Bush administration stages a terrorist attack, declares martial law, and cancels the elections, will the market go up or down?
I would point out that Tennessee is a "no income tax" state. Property and sales taxes are higher to make up the difference.
The first step will be selling student loan bonds to the fed followed in short order by State GO's.
At that point we will officially be a third world economy!
The article mentions that Tennessee has a rainy day fund. I know that California doesn't. So in some ways Tennessee is better prepared for this than certain wealthier states.
good point kirk.
also, although TN didn't see a huge boom, there was considerable increase in values directly attributable to the bubble.
I know a LOT of east coast folk who moved to North Carolina... and as that got "overly known" then people shifted to TN
it was one of the states that started to get a lot of play on all the "investor websites"...
i'm officially astounded at the bull run in commodities.... most notably steel
CLF...Top?
The fall-off in state sales tax will curtail state-aid to municipalities and lead to increases in local property taxes, hurting the RE market and effectively nullifying anything the fed does to ease mortgage rates
Wait until the realization of Peak Oil begins to dawn on the politicians....while the banker/brokers have been raping and pillaging the country the last decade, the world has run out of conventional oil. Obama sure has his work cut out. Anyone want to guess who he'll appoint as Fed Reserve Chair and Tres Sec?
well we HAD some provisions but "Ah-nold" decided to make the refund of car registrations (fairly high compared to the rest of the country) a platform of his election.....and "poof" he was elected....
Those refunds look really great now.....
Ciao
MS
Most of the states have constitutional requirements to run balanced budgets, as do many municipalities. They don't have the luxury of running deficits. Well-governed states like Tennessee do have rainy day funds that allow them to temper the downturn in receipts, but even so they have to take prompt action to curtail expenditures when receipts turn down.
Fresno County, California. Our only salvation is the high prices for agriculture products. - Matt
That is certainly the way it used to be but then that was before agribusiness went trans-regional. The windfalls from higher ag prices will not have the local multiplier (~3.5x IIRC) effects they used to have.
Fresno is on my short list for poster child.
Gov. Bredesen is a tax and spender. He just couldn't get enough of the other players on board before the RE economy ran out. It wasn't for lack of trying.
Kirk Spencer writes:
I would point out that Tennessee is a "no income tax" state. Property and sales taxes are higher to make up the difference.
Really?
California:
9.3% income
7.25-8.375% Sales
1.1-1.4% property (0.95-2.2% in exceptional cases)
Tennessee:
0% income
7-9.25% Sales
0.88-1.1% property on obviously much lower prices.
California has massive, crushing, pervasive taxes.
Gov. Bredesen is a tax and spender. He just couldn't get enough of the other players on board before the RE economy ran out. It wasn't for lack of trying.
Seems like politicians only come in two flavors these days. Tax and spenders and borrow and spenders.
What happened to the don't spenders?
What happened to the don't spenders?
They take on Steve Forbes and the like as economic advisors.
"Seems like politicians only come in two flavors these days. Tax and spenders and borrow and spenders. What happened to the don't spenders?"
There's no significant political support for don't-spenders. Otherwise Ron Paul would be the GOP nominee.
When people say there's too much spending, implicit is the phrase "except on the things that are important to me."
Seems like politicians only come in two flavors these days. Tax and spenders and borrow and spenders.
Well those are the only two electable flavors. Lets face it, if your platform is raising taxes and cutting benefits, you might as well ba a NAMBLA member come election night.
trail, yes. I meant negative for the economy, but I agree.
Best Wishes.
To what extent is this caused by a shift by consumers towards spending more on tax exempt necessities and spending less on taxable discretionary items? Are most groceries tax exempt in Tennessee?
California's top marginal income tax rate is 10.3%:
"A 1 percent surcharge is collected on taxable incomes of $1 million or more, making California's highest marginal rate 10.3 percent."
Fresno County, California. Our only salvation is the high prices for agriculture products. - Matt
No water and a bunch of dead bees.
Vallejo, the only California city whose council has approved a bankruptcy filing, probably will be a "unique case" in the state because money problems afflicting other cities and counties are smaller and have different causes, Moody's Investors Service said on Thursday.
Vallejo sole California town to OK bankruptcy-Moody's
| Reuters
Uh Huh
Obama Appointees:
Treasurer: Robert Rubin
Fed Chairman: Paul Volker
You gotta wait for Barney Frank's mega billion bailout package!
El Cliffo writes:
California's top marginal income tax rate is 10.3%:
"A 1 percent surcharge is collected on taxable incomes of $1 million or more, making California's highest marginal rate 10.3 percent."
Uhhh, yeah but i didn't wanna complain about that for fear of seeming ungrateful for all the State has done for me.
Soros: 'Acute phase of financial crisis largely behind us', impact on real economy just started.
Treasurer: Robert Rubin
Yeap, by then Citi would have broken up.
Robert Rubin: treasurer
So he can do the same to our economy that he did so successfully at C???
Pah-leeze
You may have something there with Volcker but putting them together is a zero-sum game.
Ciao
MS
when an aircraft climbs higher and higher in at an ever steepening angle of attack
it does not, after exceeding its lift and propulsion capabilities just level off
the plane stalls and falls towards the ground
unless an awesome thrust is applied at the right moment to propel the craft in a direction such that it can regain lift and control
plenty of cheap, energy was our thrust, and industrial production was our lift.
used to be one bullet in revolver...
now there's 3
bonds up
commodities up
grains up
stocks up
the moneyt and credit is coming from somewhere..
which means
the Fed PRINTS
print print print
New York state should create an investment pool for public workers' health benefits, the soaring costs of which the state, counties and cities all must start disclosing, the state comptroller said on Thursday.
"More than one million New Yorkers are counting on these health benefits. The responsible, good government thing to do is to start preparing for the future in order to protect health care benefits," Thomas DiNapoli, the Democratic comptroller, said in a statement.
Add fund for NY state worker health costs-DiNapoli
| Reuters
Are soaring coat the same as inflation?
CNN: Senate wants to sue OPEC!
Why OPEC when you can sue Bugabe right here?
RR-
No they don't!!!! Mish can't find ANY evidence of it so it doesn't exist.......
i don't need evidence to know the tooth fairy is made up but some seemingly do...
Ciao
MS
Speaking of knock-down effects of the housing bust, I had a delivery of cord wood today and the guy told me I was lucky I got it when I did because the price was going up 20%. I figured it was because of increased demand, a lot of people here heat at least partially with wood. But he said, no, it was because he gets the hardwood timber from loggers, who mostly want softwood for the mills to make dimensional lumber. Raw wood prices have plummeted so the loggers aren't logging, and no spin off of hardwood...
Talk about counterintuitive.
where's rich, elvis, mp, dryfly, sk, and tanta.
these past few threads have really sucked.
Oil bustin out again? Hoocouldanode?
I would point out that Tennessee is a "no income tax" state.
Within 24 months you'll be able to substitute "was" for "is" in the above sentence.
Ditto Florida, except that 24 months may be a conservative estimate there.
Calculated Risk,
This site is too sharp to fall for the political class' age-old BS - as anticipated, the TN "crisis" turns out to be more a political creation than a true economic collapse.
Look at the TN Department of Revenue's own statistics:
http://www.state.tn.us/revenue/pubs/2008/coll200803.pdf
If we dig all the way to...page 1...we find out that that state-level tax revenues for March were up over 18% from 06 to 07 - so now we're supposed to hand more wealth over to our kleptocratic leaders because state tax revenues for March have fallen...4%? from 07 to 08?
What a shock! A historic fall!....after a historic rise...what a disaster...
Comparing March 06 revenues to March 08 indicates that our disgustingly corrupt political class is still getting $102 million more than it did just two years ago (an era which we will all recall as being wholly without medical care, police protection, or indoor plumbing - with an average age span of 32 years...).
CR, when you retail the political class' palpable BS you are aiding and abetting them.
This TN "crisis" only exists because the kleptocrats have constructed the political system to always fall into crisis - since they are annually increasing public sector hiring to levels that are not economically sustainable - unless tax rates get increased.
And that is the heart of the scam.
Which CR has just aided.
Shame. Shame.
Amen CAS127. Its great to see a governor eliminate unneeded spending without raising taxes.
Adverse positive feedback loop?
Bob Dobbs | Homepage | 05.08.08 - 1:58 pm | #
Or just simply a vicious cycle, as opposed to a virtious cycle
OT:
Don't look now while you're all celebrating Wal Mart(burp), it looks like war is breaking out in Lebanon again.
Good eye, CAS127
Wonder what percentage TN hired during than 18% increase.
"Technically this is a positive feedback loop, CR. In a negative loop, the feedback tends to make the system more stable."
Adverse positive feedback loop?
Wiki is our friend:
In my younger days we studied motor control wiring and were warned about setting up an unloaded series motor. Without the load they exhibit positive feedback, and can become shrapnel in seconds. "Don't try to turn it off," he said, "Run for cover and hit one of the big red buttons." Certainly caught our attention.
Noni
In other local news, NY consumer confidence hit a record low in April.
I guess Bill didn't wanna toot his own horn. Maybe he isn't this bill.
anyways this explains it, sorta.
Page not found « Bill Hobbs
Good point about looking at the actual numbers.
From 2006 to 2008 it looks pretty good: up over 13% during the two year period.
Also, the single biggest declining item is the excise tax (business income tax). That was responsible for 45 million of the 38 million decline between 2007 and 2008. If excise tax stayed the same, 2007-2008 would have been up 7 million.
Well, it is true that politicians increase spending, but that is what they do. The issue here is their projections aren't working out as planned. If you look at the document linked above, you'd find that the Realty Transfer and Realty Mortgage privilege tax revenue are off by 15-24%. Sales tax is a bit flat. BTW, TN taxes grocery purchases although now at a lower rate.
Also, this doesn't include the April numbers which the governor indicated were worse than bad.
March 2008
PRIVILEGE \t\t\t\t\t2007\t\t\t2008
10701 Realty Transfer \t10,812,173.11 \t8,205,730.12
10716 Realty Mortgage \t 5,085,011.66 \t4,257,438.70
July 2007-March 2008
PRIVILEGE \t\t\t\t\t2007\t\t\t\t2008
10701 Realty Transfer \t118,264,824.16 \t\t102,790,279.91
10716 Realty Mortgage \t 54,437,208.34 \t\t 46,393,104.73
Oil - $124.44
Market says, "whatever".
where's rich, elvis, mp, dryfly, sk, and tanta.
Can't speak for the others but I'm fighting with customers over price increases... big ones kicked through due to raw material increases... been at it all week. Hard to imagine in this 'deflationary environment'.
OT:
Hey CR, here is something to look @ in regard to updating your blog here, i.e, some ideas:
http://www.lefora.com/
No Hablo
MuddlinThru, $268.1 million shortfall?
I'm sorry, but this sounds like a much ado about nothing. That's just not that much money.
Dry,
did you catch the cattle future prices I posted in a prior thread?
Dear CAS127,
Good comment, but I wonder to your point in generalÂ…for example, here in Illinois, especially Chicago/Cook County we have added a bunch of top-heavy unessential patronage jobs. A lot, I am thinking, based on the copious amounts of gravy that was flowing because of increased tax revenue. Could a radical reversal now be in the offering?
Regards,
Lol, this isn't CA, it's TN. It's 'different' here.
"...I'm fighting with customers over price increases... big ones kicked through due to raw material increases"
I hear ya brother. Have you seen the price for philosophical bullshit!?!
Tennessee Moonshine is made from fermented corn mash distilled in a cooker. It derives its name from the term "moonlighter" used in England to describe the night time runners that smuggled brandy from France. After World War I, agricultural prices dropped, so during Prohibition, many American farmers turned to whiskey making to support their families.
A typical mountain still uses a stone furnace for heat, a metal still for fermenting and heating the mash, and barrels for collecting steam and condensing the alcohol. It was located near a mountain stream where cold water could be piped in to condense the steam from the liquor.
50 lbs. cornmeal
200 lbs. sugar 12 oz. yeast
200 gal. water
Makes 36 gallons.
ppt buying late today to get in front of tomorrow...Aig earnings will bring market down tomm.
I've been off benefitting from the high price of oil.
BTW, what took so long for the moonshine comment. It was the first thing that popped into my mind. Time to break out the stills and avoid the revenuers. Hee Haw!
CAS127 said: "If we dig all the way to...page 1...we find out that that state-level tax revenues for March were up over 18% from 06 to 07 - so now we're supposed to hand more wealth over to our kleptocratic leaders because state tax revenues for March have fallen...4%? from 07 to 08?
What a shock! A historic fall!....after a historic rise...what a disaster...
Comparing March 06 revenues to March 08 indicates that our disgustingly corrupt political class is still getting $102 million more than it did just two years ago (an era which we will all recall as being wholly without medical care, police protection, or indoor plumbing - with an average age span of 32 years...).
CR, when you retail the political class' palpable BS you are aiding and abetting them..."
This wasn't me in disguise, but I wish it was.
Sebastia
Who Will Tell the People?
OP-ED COLUMNIST; Who Will Tell The People? - NY Times
We are not as powerful as we used to be because over the past three decades, the Asian values of our parents’ generation — work hard, study, save, invest, live within your means — have given way to subprime values: “You can have the American dream — a house — with no money down and no payments for two years.”
Sebastian, Do you have one of those defective computers that lacks quotation marks? Really, what is *? I thought it was only a symbol used to tone down typed profanity and indicate a footnote. Wherever you got a schoolin' they teached you some backward stuff (like the definition of "worried"). No wonder you think high credit card debt translates to happy, carefree people just out having a good time.
When did "work hard, study, save, invest, live within your means" become "Asian values"? They used to be called the Protestant work ethic.
(OT) I got my economic stimulus check today. Anybody else?
S.
But, now all Protestants are apparently Asian, so they changed the term to reflect that. It's also called Protestant Checkers, now.
Sebastian writes:
(OT) I got my economic stimulus check today. Anybody else?
lol... that's why gold is up.
Thanks !
I'm thinking that we wish we had that lock box of cash about now, huh?
Elvis said: "No wonder you think high credit card debt translates to happy, carefree people just out having a good time."
Thank-you for proving my point, that the bears can't properly evaluate conditions because they view them through the lens of Puritanism.
S.
JS writes:
When did "work hard, study, save, invest, live within your means" become "Asian values"? They used to be called the Protestant work ethic.
Tom Friedman is a f#@ktard.
How can it be that financial wizard Sebastian makes enough money to get a rebate check? With his financial accumen shouldn't he be sitting on a pile of money with the dough just rolling in?
JS | 05.08.08 - 4:16 pm | #
FWIW - today alone I made 4x the rebate cheque from the increase in gold. Let's not talk about the rise in oil the last 12 months.
So ya... us Canadians don't need your stinkin rebate cheques
I asked this at 10:30am, but didn't anyone else notice the financial stocks breaking lower with volume? This is the beginning of their next wave down, IMO. SKF to $200 before Nov. 4, 2008.
They only started keeping records of tax collections in 1961????
Sebastian, I prefer to be called worried, not a bear, although don't call me Protestant, because I'm not Asian.
did you catch the cattle future prices I posted in a prior thread?
Alec | 05.08.08 - 3:47 pm | #
Yes I did - looks like real tight spreads for feeders all the way through next summer UNLESS grain prices soften.
From CME today:
CME Live Cattle Futures
APR09 Settle 108.950
CBOT MAY08 - MAY09
Settle average about 640
Corn weighs about 50-55lbs/bu (45lbs dry weight)... say 50 lbs/bu
Corn costs 12.8 cents a lb...
10 lbs corn produces 1 lb of beef...
So $1.28 worth of corn consumed over 12 months to produce $1.09 worth of cattle.
Maybe they can make it up on VOLUME, eh?
Interesting Times said: "So ya... us Canadians don't need your stinkin rebate cheques
You know, my wife and I were talking about this the other night. We aren't going to give the money back, of course, but we don't need it, and we certainly don't need it as much as a family who's not as well off.
Oh, well. Thieves get rich, saints get shot and God don't answer prayers a lot.
Sebastia
To what extent is this caused by a shift by consumers towards spending more on tax exempt necessities and spending less on taxable discretionary items? Are most groceries tax exempt in Tennessee?
Good questions. A lot of states are in a pretty tight box on taxation. Property tax hikes here in Washington state are limited by voter initiative. (also in CA, I think.) The state gasoline tax is pennies per gallon, not a percent of cost, so when people cut back on driving, the state gets less gas tax revenue.
Food is sales-tax exempt here, so when food prices rise and people have less to spend on other things, tax revenue takes another hit.
There's also no income tax here, and starting one would require an amendment to the state constitution.
When business activity drops, the state (and some cities) lose again because the gross sales tax on business activity goes down.
Oh, well. Thieves get rich, saints get shot and God don't answer prayers a lot.
Sebastian
Sebastian | 05.08.08 - 4:24 pm | #
Thank glod I'm not religous
"*DJ AIG Takes $9.11B Write-Down On Credit Default Swap Portfolio"
Seb-How did u get a stimulus check?
Here I thought u were Buffett in disguise!
Stimulus check-Oxymoron for welfare....
When did "work hard, study, save, invest, live within your means" become "Asian values"? They used to be called the Protestant work ethic.
I think Mr. Friedman was baiting you. The MSM version of a troll.
When I scan the names of the local high school honor rolls in our newspaper, it's a bit hard to disagree with Friedman. We don't have a huge Asian population where I live, but you wouldn't know that from reading those honor roll names.
barely, :>)
I ment'd above that the late buying today was ppt to ease tomorrows down day..Or could go up since it's bad news. Where's bizarro!
Bought skf a cple times today, glad I held...or maybe not..
"So $1.28 worth of corn consumed over 12 months to produce $1.09 worth of cattle."
Orange juice sold way under the marginal cost of production for many years until 3 enormous hurricanes hit. But, now, it is back on a path below the marginal cost of production again. Could cattle be like orange juice? Stuck in a bad margin business? The Clintons are the experts at cattle futures, maybe somebody should ask them.
sure wouldn't know it from the "consumer doing his part" subheadlines re retail sales for april on marketwatch
being simply wrong about something is one thing, mis-leading is another
people's trust is what will be wasted more than anything
Oh, well. Thieves get rich, saints get shot and God don't answer prayers a lot
I disagree. Sometimes (more often than not, in fact) He answers no.
Off Topic:
AIG takes pre-tax $9.11 bln charge for unrealized Q1 loss, to raise $12.5 bln in capital
Is it just me, or is that a lot of money?
Elvis,
I think Ms. Clinton's expertise is pork belly futures..
Turned 10K into 100K in days I believe..
Oh, I thought it was cattle. Maybe someone should ask T. Boone Pickens. He should know...
...confessional thread soon.....
That is alot of money....why in the world did they raise the dividend 10%?
Hey dry- going to Sam's to get me a 60 pound box of Top loin for butchering and freezing this weekend.
Gonna use my stimulus check to eat steak for as long as they hold out. Got a couple of recharged propane cylinders too. Too bad beer doesn't keep as well.
This is going to get fugly real fast.
Just bought a stamp collection (off craigslist to boot!) and told them they would get more if they consigned, but they choose the cash.
They were out in the middle of the East Valley with an Excursion in the driveway. I think I will put these stamps aside for a while, the good ones are European, and I am sure that I can get paid in Euros some day;-}
It was kinda sad to do it, but they also said they had a coin collection that they would be liquidating soon.
Phoenix is a graveyard of sorts.
Someday this war's gonna end...
"That is alot of money....why in the world did they raise the dividend 10%?"
That was the number from the hat.
Fed Auctions 28.8 Billion
Business, financial, personal finance news - CNNMoney.com
Backed by some shaky collateral....again.
Confessional Thread? Nah. Thursday is "Tanta Ranta Day." Friday is "Confessional Day." Saturday Rock Blogging. Etc.
Bizarro world rules: AIG up in after hours trading.
Can the Fed buy AIG stock?
Bizarro world rules: AIG up in after hours trading.
JS | 05.08.08 - 4:38 pm | #
Well of course. This is clearly a bottom.
Elvis, that only worked when the dollar was a lot stronger than the Brazilian real.
We are the weakest currency of the beef producing countries (well, maybe Argentina, but they manage to be dumber than us)- what I can tell you living in a ranching state is that they were liquidating the herd last year due to rising costs, and that they did not restock heavily this year due to ridiculous feedlot costs.
In other words, thar ain't enough cows out there on the range.
Now, what is going to happen to McD and the other beef pushers when the double hits?
That dollar menu is going to be two buck chucked.
Someday this war's gonna end...
JS-Your kidding right..
If it opens higher tomorrow, I will dance around fire with Jim Morrison...
Yeah, It's the meth and pot. Ya have to be careful about those housing deals, no matter where they are.
AllenM said: "AllenM writes:
Hey dry- going to Sam's to get me a 60 pound box of Top loin for butchering and freezing this weekend."
I hope I'm not the only one to catch the irony. A survivalist with a grim outlook on the future...yet he's going to spend his check, thereby stimulating the economy, LOL!
Sebastia
Oil - $124.44
$124.55 now
$124.55 now
ac | 05.08.08 - 4:42 pm | #
I'm gonna watch all the mad max movies this weekend.
This is truly getting scary and I am long oil ETFs.
Seb, that would be a temporary stimulus, unless you go and unplug my freezer. What makes you think I am a survivalist? I like civilization, it is good and comfy. What is grim is that if I expect that $6 buck a pound steak to go to $12, buying and freezing right now postpones my hedonic adjustment until they might just get around to adjusting my paycheck. In other words, a perfect illustration of smoothing, and there is no net stimulus by the end of the consumption period.
Think it through.
Someday this war's gonna end...
JS,
AIG is halted - still 44.15.
anon, halting AIG is pretty interesting..strange forces at work here...
AIG DOW component halted. I wonder if the Fed is going to conduct another market levitating exercise AH...RESCUE! Can't let it slip below 12,800
Remember everyone, deer is a perfectly good substitute for cow. As long as deer roam the neighborhoods, the demand for cow will be suppressed. However, when deer stop roaming the neighborhood, hide the dog.
Could cattle be like orange juice? Stuck in a bad margin business?
Not likely for long - it only takes about 12-18 months to raise a steer from feeder calf to fully finished animal ready for slaughter (depending on how small the calf you start with and how big an animal you want to send to slaughter). If they can sell corn for $6/bu they don't have to pump the corn through a cow first - exit the cow biz instead.
Orange tress take a lot longer to grow I believe (how may years from planting to first real harvest?)... Not as easy to pull the trigger there - longer repercussion.
Elvis-Venison sausage! Winner winner chicken dinner!Jerky too. Plus it's lean meat, we could all look like Jimmy Stewart
Can we stop with the WWCD comment- my six year old says it obsessively.
CNBC immediately blew off covering AIG's earnings. GOnna be interesting to watch, when it opens
Elvis,
I think Ms. Clinton's expertise is pork belly futures..
Bill?
aig now trading with a 41 handle
"aig now trading with a 41 handle"
GET IN NOW - ON THE DIPS!
Dryfly,
Bill? Cigars!
Allen-Big kid here but since I enjoy your posts I will oblige
If they can sell corn for $6/bu they don't have to pump the corn through a cow first - exit the cow biz instead.
that would be a funny comic
"dryfly writes:
Elvis,
I think Ms. Clinton's expertise is pork belly futures..
Bill?
dryfly | 05.08.08 - 4:53 pm |
No Monica
I hope I'm not the only one to catch the irony. A survivalist with a grim outlook on the future...yet he's going to spend his check, thereby stimulating the economy, LOL!
why are you an idiot?
AllenM said: "buying and freezing right now postpones my hedonic adjustment until they might just get around to adjusting my paycheck. In other words, a perfect illustration of smoothing, and there is no net stimulus by the end of the consumption period.
Think it through."
If you're buying now but don't view that as immediate stimulus because you're delaying the consumption, your reasoning is over my head.
S.
In response to CS127 and Sebastian, who pointed out that this March revenue is still above the figure of 2 years ago...
From the Tennessee state government website, here are March total tax revenues from 2002 onward
(I didn't see a year-by-year summary, so I just took March revenues year-by-year):
March '02 = 558M
March '03 = 633M +13.5%
March '04 = 691M +9.25%
March '05 = 720M +4.5%
March '06 = 765M +6.25%
March '07 = 905M +18.25%
March '08 = 867M -4.25%
Yes, you are right that revenue is still very high compared to past years. But the fact remains that this is a significant break in trend, from an average increase of 10% revenue since '03 to a sudden reversal (without any recession to cause such a reversal, right Seb?) of a 4.25% decline in revenues.
Yes, governments do foolishly increase their spending during the boom years. Isn't that exactly the point that CR has been making? The boom times will need to be unwound by reduced spending by governments, as well as households.
ShortC-Seb mentioned that he might give his stimulus check to the state of Tenn. as long as they didnt declare a recession...
Seb, when I pull the steaks out of the freezer and eat them, I don't have to go down to the supermarket and pay today's price.
My price plus some electricity is already locked in, plus Fry's or Safeway doesn't get my business then.
Stimulus is simply consumption brought forward- it doesn't have any long term effects.
I guess the term "ricardian equivalence" doesn't ring any bells either?
Ah well, Lucas fought that out a long time ago.
Someday this war's gonna end...
OT: As some of you may know, I'm renting a condo while I wait for the dust to settle and the smoke to clear.
I got a knock on the door a little while ago, and it was a Process Server with a foreclosure notice. This wasn't unanticipated.
Add another anectdotal story to the collection!
AllenM writes:
Seb, when I pull the steaks out of the freezer and eat them, I don't have to go down to the supermarket and pay today's price.
I just caught a major ration of abuse in the previous thread for claiming there was an investment component possible to food purchases. Last night was Top Sirloin 1.2lbs repackaged and frozen Dec '07. I don't generally retain prices but this one had the original label in the ziplock baggie. $2.19/lb.
I've got a admittedly cushy but non-tenured artist-in-residence gig at SUNY: part-time, full benefits...
lucky me...
special meeting called tomorrow with the university president to discuss budget cuts by NY State that could be "very bad, perhaps terrible, if not catastrophic."
bye-bye job o' mine...
I keep waiting for the STHTF in NY State...
perhaps the wait is over.
Hey RobD, BDL basically banned me for pointing this out in 2005- I wonder if he is ready to eat crow yet, that might be all he can afford given his nothingburger raise from the State of California.
I call it postponement of hedonic adjustment.
Rational beyond all belief.
Re: Oh, well. Thieves get rich, saints get shot and God don't answer prayers a lot.
Sebastian
Actually, God answers ALL prayers.
It's just that usually the answer is NO!
They only started keeping records of tax collections in 1961????
Yes. The first sales tax in the US was in 1921, most states didn't have them until the economy tanked in the 30's.
"(OT) I got my economic stimulus check today. Anybody else?" - Sebastian
You actually qualify?
Bob Dobbs,
Technically California does have a Rainy Day fund (called the Budget Stabilization Account) which contains a whopping $1.02 billion. Ahnold's budget already plans to draw that down to $0.00