Is YRC a bank holding company?

We are all bank holding companies now.

YRC...is that pronounced like "yerk!" Kinda like the sound one makes as the noose snaps? Or is it "jerk"?

Meh, both apply.

oh yeah. PBGC took over obligations at two pension funds this week. we're gonna need Pension Fund Failure (what day of the week)?

PBGC Protects Pension Plan at LandAmerica Financial Group

PBGC Negotiates Agreement to Preserve Wyoming Valley Health Care Pension Plan

Here we go.

If this application doesn't get swatted away PDQ, every company that still has a pension plan will be lining up for the bailout.

"

Is YRC a bank holding company?

It's a stability something or a lifeblood of the something."

If we don't bail 'em out we'll have systemic failure of moral hazard, from chrissakes! Just think of the carnage! And the children!

I wonder how much longer it will be, before shareholders start dumping everything...

"before shareholders start dumping everything... "

Certainly every company with a pension plan or a union.

Lots of companies will need a reboot in BK court.

truly this is the ultimate tell on banana republic.

Don't be silly man. Teamsters don't actually work.

The ones that buried Jimmy did.

"The ones that buried Jimmy did. "

You're blurring the line between work and pleasure, sir!

Don't be silly man. Teamsters don't actually work.

Sure they do. As long it fits their schedule which is a lot like my Doctors office.

You're blurring the line between work and pleasure, sir!

LOL! Good come back...

I got the TARP application, now where do I send it in? I want to get mine in before the well runs dry

"Livin' on reds, vitamin C, and cocaine, and TARP" just sounds wrong.

"Chevrolet: Like a Rock"

Lyric should have been "what a crock".

I got the TARP application, now where do I send it in? I want to get mine in before the well runs dry

Well runs dry - that's funny - what do you think the treasury is, 'The Oil Drum'?

book1 - Berlin rocked back then. It was Broward Time 24 x 7

I will just assume the drivers are unionized (Teamsters most likely), so this is a slamdunk. If I were the company president, I would get a piece of the loot, too.

YouTube - BOB&TOM TV: "Obama Man" by Greg Morton .....The candy man

Yancey - probably everyone inside a company warehouse is also.

I say give 'em a bailout...if they'll haul a few truckloads of banksters. To somewhere deep in Alaska. In mid-winter.

Teamster was the old fashioned word for the guy that drove the stagecoach with a team of horses up front, and now the teamsters want money up front...

Wasn't YRC the company that proposed paying the pensioners with all the company-owned land on the books?

I just loved Obama's comment about the "unsustainable debt". Best fucking laugh I have had all month. The more he opens his mouth, the less respect I have for him.

"its estimated $2 billion pension obligation over the next four years."

Wait just a second... How many dang retirees do they have and what are their pensions? My company has been in business 40+ years with 200,000 current employees and I can't fathom our 4-year pension obligation is $4 billion dollars! Or am I wrong?

How much is the entire US Social Security obligation for the next four years?

Samdog,

No, the clubs still ran until around 1936. The Jewish entertainers just got scarcer every year...

Schwarzenegger to propose selling San Quentin Schwarzenegger to propose selling San Quentin - Santa Cruz Sentinel

samdog & dryfly:

you are correct Sirs.

and Dryfly, I have the same concern.

"When do the Roofers get bailed out? What about the Painters? When do the Electricians get paid?"

Depends on if they are union and how much they kicked in to Obama's campaign.

Newsflash....PURINA applies for TARP due to overrun of elderly eating product...needs capital to expand production.

According to an October 2004 article in Financial Planning magazine, trucking was underfunded by 33% in the Pension Benefit Guaranty Corporation (PBGC) multiple-employer program.

I bet they invested wisely since 2004 and have not taken any hits to their already underfunded pension

How likely is this a precursor to the CA pension bailout?

Going to:

deF-Con 2

Idea: sell CA to the Chinese SWF using their accumulated US treasuries for payment. They can then build Buicks in the inland empire for export to the US.

GM & Chrysler got some, so why not YRC ?

Serious question - Will Obama/Geithner ever say no ?

States, Counties, Cities School Districts..... all want TARP.

What if the Treasury guaranteed all of CA pension shortfalls?

what's funny is my license plate says "bailout," and I don't think anyone here gets it.

I know I have always been 'out there', and perhaps some have disagreed with me silently for the sake of politeness or decorum.

So I have to ask now, is there anyone who believes the United States of America will not go bankrupt? Either directly by declaring a default or renegotiating with creditors, or implicitly by printing enough money to cause a serious devaluation. If you don't feel comfortable with a binary choice, perhaps give a ##%

I can guarantee that I will not goad you. I'm just genuinely curious about what relatively informed opinions which are not my own.

what's funny is my license plate says "bailout," and I don't think anyone here gets it.

Do you drive a convertible?

deF-Con 2 is very similar to military DEFCON-2, albeit in a financial sense...

DEFCON-2 was used during the Cuban Missile Crisis, to give you an idea of where my head is at.

8 ignores8 edit +1, Im slow,

after the zero hedge scrbd posting of the Chrysler dealersips came out.

I made one phonecall.....he answered the phone "No its not on the list, your caller number 17"

I asked a small parts supplier, any news on these 6 in state dealerships? He said he hadnt heard a thing.

No short bank list in Europe, or well anywhere....says airpocket forming under the banks. Could have an exigent circumstance friday consolidation.. Consolidation is code for "zero-out". IF it goes, it'll go early. Im not sure of a BKUNA burger stick save helps....it might.

You know, the entire political economy could come apart rather quickly. Companies, pensions, medicare, FICA, cities, states...

Iceland, Argentina, Russia, U.S.?

I've done what I can to get ready. I have a supply of food, water, money (real and paper), and I'm armed.

Fight the power.

EHP,

You have worn the mantle of MP for quite awhile now. You write clearly and make sense. If you have moved to this position then the possibility is probable.

Myself? We are doomed. I am here to front run it a bit and learn. Can I make a convincing case for the doomed part? No.

Sorry EHP, but your posts aren't out there enough to be considered crank material.

Start typing in all caps and call everybody a dope and mebbe you got something there...

No, this is going to go down like a Vegas hooker.

What's going on here anyway?

This is online this evening courtesy of the WSJ:

"The Treasury has said it has between $110 billion left in the program."

Let see, is that 0 to 110 billion dollars, or 110 billion and 700 billion dollars?

And earlier today I notices this in a Reuters story:

"Coca-Cola (NYSE: KO) announced Thursday it will test a new plastic bottle in North America that's partly made from sugar cane and moasses."

Sugarcane's a plus, but the "mo' asses" part doesn't sound too yummy ....

EHP,

I don't consider myself to have 'a relatively informed opinion', at least not in comparison with you and others here on the board. But since I'm looking at this oozing pile from the outside (South America) I always worry about whether the reserve currency status of the US will simply keep it afloat for long enough to see other competitors go down in (monetary) flames first. The recent action to 'suspend disbelief' in the markets could not have been pulled off in any other country and those dollars they are printing have a whole world to roam before (if ever) coming home to roost.

This may go on for quite some time yet and by the time it can no longer do so, I may not even matter any more.

Disclosure: I saw my old man foaming at the mouth about Greenspan and the coming deflationary spiral as early as the late '80s. He had to wait for 20 years of 'prosperity' before being proved right. I wouldn't want to follow in his footsteps.

Sugarcane's a plus, but the "mo' asses" part doesn't sound too yummy ....

Could have been "mo'hairs" but Clarence Thomas owns the patent.

The government's debts will be inflated away. I just don't expect it to get going until about 2014 or 15.

Destruction of the dollar may well mean the destruction of the US government as we know it - the buck is the source of much of their power, though they don't seem to realize it.

They will once it's gone.

EHP;

For a broad enough definition of Bankrupt, sure. Effectively the U.S. already went bankrupt when Nixon closed the Gold window. It was clear at the time that the debts of Korea, Vietnam, the "Great Society" and guns 'n butter in general were not payable in a fixed currency.

At this point, I expect more of what we've seen since then, i.e. inflation. The only question is how much how fast. I d not expect a default or negotiations, because they don't need to do that. It's easier to just print and inflate.

No! I want to be Keith Richards...It will need a pirate

Nice one homedad43 - stick save and a beaut...

sm_landlord:

You can't have serious and chronic inflation without a blowback of some kind. When and how?

Who knows.

OT but of interest perhaps. Made a deal with the developer two months ago for an easement on my property. Told that I'd have a contract for review in two - three weeks.
Still nothing.

@RockyR,

Yes, we can choose to end in Fire or Ice, but either way, it comes to an end.

Our government has shown over many many years that they possess no mechanism for self correction. The bailouts will proceed until they can no longer continue. The government's only weapon is an unlimited supply of dollars and they will use it and abuse it until they can't. The dollar therefore must implode. The first step is a rejection of our debt by foreigners. This has already begun and why the Fed has resorted to monetizing the debt. The next step is the rejection of the dollar in global trade. Those that do accept dollars for trade will immediately sell those dollars. This game of hot potato with dollars (vertical increase in the velocity of money) causes inflation to skyrocket. It's the only way out so everyone just relax and enjoy yourselves in the meantime. No use stressing about what you can't control and is inevitable anyway.

At this point, I expect more of what we've seen since then, i.e. inflation. The only question is how much how fast. I d not expect a default or negotiations, because they don't need to do that. It's easier to just print and inflate.

This credit cycle - once we do that NO ONE, and I mean not even Americans, will lend to the USG in dollars again.

Just wait. Truckers will be threatening strike and subsequent collapse of interstate commerce before this is over. They will get their bailout.

EHP - I'm not sure about a USA BK. I am sure of a currency inflection point. I am sure of a spike in 30YTs.

Yancey Ward,
The government has undertaken a lot of guarantees and spending. Fannie Mae, Freddie Mac, the Federal Reserve accepting assets above market value, backstopping banks, backstopping insurance companies, FHA doing big business, the need for state/municipal supoprt, FDIC bond guarantees, etc...

$13tn spent+guaranteed according to Bloomberg on March 31, not counting the $6tn of FNM+FRE guarantees
$7tn in public debt, $4.3tn in government debt. I will ignore Social Security/Medicare because they are a few years off.
US Money supply is at M1 $1.6tn, M2 $8.3tn

Once a fear of alternatives subsides, there is an incredible positive feedback loop waiting to be unleashed that would encourage USD devaluation/money printing/capital flight. In that context creditors will include at least a good chunk of the outstanding guarantees/insured debt as a publicly held US liability. The only response is to print the funds. Printing the trillions (either to pay off the principal, or to pay the high interest rates) required does without a doubt cause a complete collapse.

I don't think it will take 5-6 years because of this massive shadow liabilities column in the ledger, and because the maturity of outstanding maturities is absurdly weighted to the short term (in large part because lenders are fearful of long term credit risk of the USA). Citizen energyecon has done us all the favor of putting that weakness into chart form.

This backstopping the insurers as an industry was the final straw. I cannot have been the only one to see them diversify into "guaranteed stock market tracking returns" or hear of their sub-par investment performance, or notice the high overhead/commissions in what developed into a profligate sales industry over decades of credit supported growth. It tells me there is no doubt all of this can be close to paid for, and so better to prevent the animal spirits from being spooked

Pension funds have been "raided" by the ponzi-men. Many people on the boards were in cahoots with the "investment" advisors, and there were kickbacks involved.

Pension Pulse: What About Stress Testing Pensions?

@Basel Too: we couldn't replace overground drivers in sufficient numbers within the week or two we would have before a major disruption turned into outright calamity.

So I have to ask now, is there anyone who believes the United States of America will not go bankrupt? Either directly by declaring a default or renegotiating with creditors, or implicitly by printing enough money to cause a serious devaluation.

One of those seems inevitable.

Just wait. Truckers will be threatening strike and subsequent collapse of interstate commerce before this is over. They will get their bailout.

Teamster truckers are a minority in most of the USA today - plenty of independent operators & non-union shops all over the 'heartland'. Then of course there is Mexico & Mexican truckers - can always let them in.

The only part of the country where union truckers hold power is in the NE... think the I 80 corridor from Cleveland to NYC & I 95 from Boston to say DC. All else is non-union.

But imagine the violence at truckstops & rest areas in say Pennsylvania along I 80 when the 'scabs' start rolling in. Yiksers!

So, what have you scamps been up to while I was unplugged?

Telling our wives how much we hate Vegas hookers...

Does anyone really see inflation happening this year? Too many people losing jobs, ongoing credit destruction, more large BKs to come, collapsing house prices, very low velocity.

I can see the dollar sinking to below 70, but I don't think there is enough velocity to generate serious inflation. No wage spiral possible. I just don't see it in the cards for the rest of the year.

Previous passing of the reserve currency torches have happened over generations. Experience goes against me. Then again, has the reserve country ever raised the stakes this high. In effect to play chicken with creditors. Did they have unified blocks of creditors like Japan/China supporting the reserve currency for their own self-serving purposes. Did they have the same market access and information dispersion? I don't see how it happens over a generation this time. I guess smart money says things take time, 5 years is a small period in the big picture. I didn't know at the time the housing bubble would carry on from the dotcom bubble. Then again, I didn't know beforehand global trade would instantly drop off a cliff with great unity.

I don't mean to imply the US suddenly becomes poor. I think it will be like a dollar 2.0, and all outstanding debts/credits from dollar 1.0 will be forgotten. The dollar 2.0 will be the one priced competitively to allow for a balanced current account

This is what happens when all you have is a society of yes-men.
Nobody can actually think or decide beyond their check-off sheet.

adobe flex, silverlight Job Trends | Indeed.com

There, see that?
You don't get to pay $40/hr for a guy with 2+ years of Flex experience.
The demand curve is too strong.
There's too much demand and too few people who qualify.

Heck, you don't get to pay $40/hr for any guy, even new Indians, without a corresponding latent, back-end cost.
And you don't NEED two years of experience, that's a game being foisted by somebody with a vested interest, it's in some fricking template somewhere.

Drop the requirement to 6 months or a certification, raise the rate to $45 and viola, you get a selection of guys who will be happy to take the gig.

That goes for you Phoenix guys, too.
Do a certification in a few weeks and bump your price & demand almost immediately.

Now I'm going back to pool & sex.

@dryfly - I just wonder if this stops with yrc. Some of those names are big names even on the highways here in the south: yellow and others I immediately recognized.

We'll see. I hope I'm wrong on this one. I often am. Might as well change my name to karl denninger.

/ducks

wow, this sort of hits home personally, once upon a time I actually ran a part of ROAD's pension plan, before it merged with yellow to become YRC, (firm lost the account after the merger, and I left the company beofre that).

Telling our wives how much we hate Vegas hookers...

Rumor is the Berlin ones rock much better.

I read in the past few days (I thought here on CR) that insurance companies are only insuring houses for the "current market value," and not the amount owed on the loan. Anyone else hear that?

Depends on if they are union and how much they kicked in to Obama's campaign.

• you are so full of s#!t.

"In addition to venomous political opposition, the republic had to contend with a weak economy plagued by high rates of inflation and unemployment. Inflation was fueled partly by the enormous wartime debts the imperial government had contracted rather than raise taxes to finance the war. Even more inflationary were the enormous war reparations demanded by the Allies, which made economic recovery seem impossible to many objective expert observers. Inflation ruined many middle-class Germans, who saw their savings and pensions wiped out. Unemployment also remained epidemic throughout the 1920s, hurting millions of wage earners and their families. Their economic misery made these groups susceptible to the claims of extremist political parties."

Germany - The Weimar Republic - Problems of Parliamentary Politics

these guys figured out how to do inflation with rising unemployment... so can we.

EHP wrote: I'm just doing my thing, whipping the crowd up into a panicked frenzy

Preaching doom to the already converted hardly seems a fair test of your skills.

Convince them of a green shoot and I'll be impressed.

factoid :

Although states around the country are beginning roadwork projects, the Department of Transportation had spent only about $11 million on highway projects through the first week of May.

re: things you might have missed if unplugged
James Simon of Renaissance Technologies, this quarter in the market "has been totally bananas."

B-A-N-A-N-A-S B-A-N-A-N-A-S

We'll see. I hope I'm wrong on this one. I often am. Might as well change my name to karl denninger.

Need to find your INNER CAP LOCK first.

I never said that I hated the Vegas hookers. That wouldn't be nice.

"Hate" is reserved for Wall Street IB types.

Is YRC a bank holding company?

They are a bag holding company - and they're about to hand that bag over to the US taxpayer.

You don't wanna know what's in the bag . . . .

"You don't wanna know what's in the bag . . . . "

Hey, dryfly...THAT's where they put ol' Jimmy's corpse.

Using BR's apt toothpaste tube analogy vis. the bond market and quantum stupidity...erm...quantitative easing..., it depends on hard B.S. Bernutty tries to step on both ends of the tube.

Yup - the guy seems to be a lousy 'dancer' too [heavy clumsy feet].

To EHP's question:
I'm a nobody, but I want to share something.
I think its a mistake to dismiss the ruling class as stupid or incompetent. Tactically, because it disarms or blunts our just opposition. But also, because I don't believe it's true. I think it more reasonable that once something becomes obvious to you, that BK is inevitable for example, it has been obvious to them for much longer because (we now know) they have been moving the levers. Further, I think its reasonable that if something like that has been obvious to them for some time, and that they've set the policies that have lead to it (as has been argued here), and that they've arranged the public debate, the media discussion, etc. to reinforce it too (as has been argued here), then they intended it. Judging from the commentary here, many are ready to put these pieces together, and accept this. AC said "Destruction of the dollar may well mean the destruction of the US government as we know it - the buck is the source of much of their power, though they don't seem to realize it." I think we should consider the possibility that they intend the destruction of the dollar and the U.S. government as we know it. Do you really believe that "they don't seem to realize" that "the buck is the source of much of their power"? So, if they've engineered the destruction of the dollar, where are they going from here? Somewhere outside the current context, requiring the destruction of what had been the U.S.
Being a total non-expert, I have no support for the above except my life of observation. But I think its what the commentary here, also, adds up to.

Hell we are so far ahead of you people now, I applied months ago, and changed the sign out front a few weeks ago. Yep sitting pretty now. I will probably buy out the taco vendor on the sidewalk now.

Some talent still left within the FDIC: FDIC economist charged with trying to rob Missouri bank

anyone else getting itchy to buy more gold and ammo right now?

Just did that this week.

"Demand away, who's going to give you that? "

My solution is one world currency independent of central banks. How do you propose to avoid Weimar inflation?

"commodity indices go up and down with supply and demand, so they are not smooth enough to index something like a COLA against. Imagine the screaming retirees if we had a commodity market crash. Not to mention the temptation for governments and large N.Y banks to manipulate commodity prices even more than they do now."

My algorithm would be a weighted index of all liquid tangibles: commodities, calories, gigabits, weighted against the Forex and other paper claims. Manipulation of the spot price for oil wouldn't have much impact. How does CPI accommodate for manipulation?

Newbie 101 - the rich & powerful don't own 'dollars' they own assets that can easily be denominated or arbitraged into any currency or 'wealth measure' they so choose at the time. They own whole companies [or enough stock to control them], big land holdings, buildings, etc. They only monetize their assets long enough to complete transactions then bury the net proceeds back into 'hard assets' again.

Easier to avoid taxes and less subject to 'currency fluctuations'. In short 'money' is for little people... applies even to the dollar.

If the dollar goes kaput, what's the currency for the poor average Vegas hooker?

Condos?

I have a coworker like that. Complaining he cant afford his chevy cobalt payments (its like a $12000 car!!!)

buys $2000 in SLR cameras for xmas (for him and his wife)

and now he's looking for a house with an fhfa loan because of the $8000 credit.

"but that is going to lead to some very high inflation three years down the road,” [Patterson]said."

Except that information travels just a bit faster now. 3 years might turn out to be 30 seconds for some hot potato holders.

Newbie101,
The idea of sovereign bankruptcy is not new for me, just been a matter of timing. I resigned myself to this having been the bubble to end the bubbles last fall. I have not assumed stupidity on the part of those in power, at most it would be a divergence in interests. However I also accept that from their perspective, they may not have personally accepted the logical conclusions. The reasons to pursue a irresponsible course of action can be justified in a number of ways. Assuming they know what they are doing, they are trying to force as much of the losses on to creditors. Besides, it wouldn't matter if they did want to avoid an effective bankruptcy. One of the reasons for continuing the status-quo is that a collapse of the US financial sector would have had the same consequences as a sovereign default

dryfly- I don't see that that contradicts what I just posted, on the contrary. It de-nationalizes them, and suggests this principle: To manipulate the "little people", manipulate their money.

AC said "Destruction of the dollar may well mean the destruction of the US government as we know it - the buck is the source of much of their power, though they don't seem to realize it." I think we should consider the possibility that they intend the destruction of the dollar and the U.S. government as we know it. Do you really believe that "they don't seem to realize" that "the buck is the source of much of their power"? So, if they've engineered the destruction of the dollar, where are they going from here? Somewhere outside the current context, requiring the destruction of what had been the U.S.
Being a total non-expert, I have no support for the above except my life of observation. But I think its what the commentary here, also, adds up to.

Well let's say for the sake of argument that some group out there sees US sovereignty as an impediment to setting up some higher level world government and is intentionally destroying the dollar.

The problem I see with that is this is going on with multiple currencies and countries.

A world of impoverished citizens and discredited financial systems may be rather difficult to mold into some unified whole. It seems like these kind of things are more precursors to war and fragmentation and that currency destruction is often associated with lawlessness and ungovernable populations.

I don't see how that does anybody much good.

One of the reasons for continuing the status-quo is that a collapse of the US financial sector would have had the same consequences as a sovereign default

That is why you won't have actual US-no-pay sovereign default THIS cycle... next cycle when nobody lends to us in dollars [instead requiring payment in some neutral currency or commodity equivalent] THEN we default for real. Until then they get dollars - lots & lots of dollars.

bANK fAILURE
I know right? the real news these days lies in the margins
I may not like Mack or Blankfein, but I ranked them highly because that's exactly the way I think people should sign and date. Clear, to the point

month/day/year just really bothers me. I understand it's because of the convention when speaking the unabbreviated date... but gimme a break, no one writes 4$. They write $4 because it is the logical way of writing numbers. Just like it ought to be day/month/year. Unlike $4/4$, the writing of dates can be a big problem if you don't know what convention they used

Yep.

The mindset is boggling. He's not going for an inexpensive starter house or condo either. The idea that a house purchase, particularly the first one, should be a painful process where you have to tighten your belt, clean up your credit and realize that you're making the most significant purchase of your life is gone.

Whats even more amazing are young college kids who think buying a house is an entitlement.

SLR, ISV...?

Is there a "list of abbreviations" tool for Firefox?

No need to wait for election FAIL: CA asks Fed for TARP funds

dryfly- I don't see that that contradicts what I just posted, on the contrary. It de-nationalizes them, and suggests this principle: To manipulate the "little people", manipulate their money.

Said that way I agree. And it isn't just western capitalist - see what the CCP via SAFE & PBoC do to the dollar yuan exchange to keep goods flowing to WalMart... power transcends politics.

EHP-
Even if it were true that "they may not have personally accepted the logical conclusions", I think what will happen is likely to be the same, once they do: at some point they would suddenly realize that they need to either move somewhere else, or build something new. But this "suddenly realize" scenario seems less believable to me.

(I didn't say you think they're stupid, but many people use that as a shorthand, unfortunately.)

AC said "Destruction of the dollar may well mean the destruction of the US government as we know it - the buck is the source of much of their power, though they don't seem to realize it." I think we should consider the possibility that they intend the destruction of the dollar and the U.S. government as we know it. Do you really believe that "they don't seem to realize" that "the buck is the source of much of their power"?

Intellectually, they might know that death of the dollar will bring down the house, but in day-to-day decision making they are financial and political termites. They aren't planning on bringing down the house. They are just processing cellulose. The secondary and tertiary effects are not part of their decision making process.

Video game industry sales down 17 percent--again

"For the second straight month, video game industry sales tumbled nearly 17 percent year over year, a downward trend for a market segment that had previously seemed resistant to the economic pressures of the recession."

there's a chrysler dealership in the himalayas

just replying to the post about flex.

seemed relevant. guess you dont read the "in reply to"

EHP, it will absolutely go bankrupt, the only question is how. I think this is the consequence of actions that were set in motion 25 years ago, and are perhaps an inevitable consequence of human nature.

Hans. My apologies.

The rail numbers for autotransport confirm how bad things are for the automakers.

I'd assume food shipments are down due to less foreign demand, i.e. China?

Basel Too (profile) wrote on Thu, 5/14/2009 - 8:34 pm
do californians suffer from deficit fatigue? I can't keep track of which numbers mean what.
Wasn't there a $40B number three months ago or so?

This is subtle so stick with me. The $40b was a combined '08-'09 shortfall and '09-'10 deficit. Cuts and tax increases intended to make up ~$32b of that. $8b was just ignored despite the Constitutional requirement of a balanced budget. Don't ask me, they did something like pulled revenues forward and deferred spend to next FY and planned on reversing that as soon as we got to that point. Anyway, that $8 didn't go away and since the Feb projections of decreased revenues actual revenues for Mar-Apr are down another 15% annualized. So, anyway the latest shortfall between now and the end of FY '09-'10 (Jun '10) is $21.3b.

They are saying they are going to need the money by October

"According to the report, the male attorney under investigation by the FBI works in the Office of the SEC's Chief Counsel and "has access to a tremendous amount of nonpublic information"....The report alleges both the male attorney and female attorney - who works in the enforcement division - "traded in the stock of a large financial services company""

There's your problem right there.

There is no economic justification for a tremendous amount of information about a financial services company to be nonpublic.

Wholesale prices plunge
Meanwhile, Japan's domestic Corporate Goods Price Index, which monitors business-to-business prices, showed a sharp 3.8% drop in April from the same period last year, according to the Bank of Japan.

Various news reports said the on-year fall was the widest since July 1987.

Compared to February, the index was down 0.4%.

The headline reading compared with the average market forecast of a 3% fall from separate Kyodo News and Bloomberg surveys.

Michael Kitchen is a Pacific Rim editor for MarketWatch and is based in Los Angeles

Californias's budget projections have been in a constant state of emergency since I don't know when. And they are supposedly 10 years ahead of the rest of the nation. See your future.

Allowing insiders to trade, just not in companies they have secret knowledge about, ignores the fact that everything is connected, and humans have the urge to spread news for mutual gain. If a company is being investigated, the market should know. If the market overreacts to false rumors, the overreactors will lose.

Transparency now.

"NorkaWest (profile) wrote on Thu, 5/14/2009 - 11:30 pm
The secondary and tertiary effects are not part of their decision making process."

That some of the smartest people in the world are not thinking about their children and grandchildren, hoping for something even grander for them, I don't believe.

Bond Girl, nice link with some great quotes that show just how out of control the Great State of California is. I like a couple in particular:

[Genest (the finance director) said] California isn’t seeking a federal bailout, just the backing that would allow it to raise money from investors. [T]he precise details of the state’s borrowing plans, including how the warrants would be repaid in two years, have yet to be worked out... “We’re going to need a big infusion of cash,” he said.

Yep, like they're grappling with any of the core problems here! No revenue to pay, no plan on expenses. They're just like a drug addict trying to avoid the crash. Wake me up when they start talking about restructuring pension plans. Until then, it's not serious.

The roof the roof the roof is on fire
The roof the roof the roof is on fire
The roof the roof the roof is on fire
We don't need no water let the motherfker burn
Burn motherfker burn

So do you all think that CA could sell off state property successfully in this environment?

fried (profile) wrote on Fri, 5/15/2009 - 3:51 am
reply Ignore user
SAN FRANCISCO (MarketWatch) -- California Treasurer Bill Lockyer asked U.S. Treasury Secretary Timothy Geithner on Wednesday to authorize assistance for his state from the federal Troubled Asset Relief Program, warning that depressed tax revenues may cut into basic services and halt the building of infrastructure.
In a letter, Lockyer asked Geithner for TARP assistance for California and "other financially strapped states and local governments which face a severe cash flow crunch."

It's a good thing they discovered that bottomless source of wealth, along with the water engine and the perpetual-motion machine.

"A world of impoverished citizens and discredited financial systems may be rather difficult to mold into some unified whole."

IF, this hypothetical dollar crash is by design, I would pin it on some sort of fanatic group. I think there are many more reasons why some peoples outside the US would rather see Americans dead than "molded" any "which-way". Over the course of our history, we have killed many members and family members of militant zealots. We have been blamed for 10-times that figure. A specific example of that is the dilemma we are now faced with the 200+ Gitmo prisoners. We don't know what to do with them. They are FILLED with hatred for this country and people - and in THEIR eyes rightfully so. The Administration realizes they are walking time-bombs. There are hundred of thousands of extremists like that. Had some other Country invaded my Nevada, shooting, maiming and killing my friends and family - would there be ANY question I wouldn't destroy that country by ANY MEANS possible? None in my mind. Upsetting the offending country's currency is "chump-change" response. I'd want blood as well.

Is it possible this has been orchestrated vs. man being greedy and stupid? I'm not informed enough to know. The only thing I CAN do is position and cover myself for all possibilities & probabilities.

"the water engine and the perpetual-motion machine. "...

Wave energy coming to Scotland. And yes the Sun is in perpetual motion relative to the Earth. Not bottomless, but maybe blue sky.

Yeah, but they are also talking about LA's Memorial Coliseum and local fairgrounds

EHP, regarding your default/devaluation question, I am not an expert but I have felt for quite a long time (years now) that this is the inevitable outcome of the debt binge of the last 8 or so years. So mark me down for that.

Some people say that you can not have inflation without wage inflation, to which I say... Argentina, Weimar Germany, Zimbabwe, and lots of others I'm forgetting/overlooking.

Remember the story about the asshole being the boss of the body?

States can default on their obligations, but BK does not apply. 10th and 11th amendments of US Constitution. (Hypothetical discussion, of course.)

"preserving the home mortgage interest deduction for her constituents."

Easily on a par with subprime in creating debt bubble.

there's a "tenth" amendment?

can't think of any area, except maybe family and probate law, that the federal courts and government still cede to the states.

for you, yogi -Jimi Hendrix w/ the Rolling Stones

Bond Girl
Would it be a Federal court with jurisdiction then, or an ad-hoc agreed upon 3rd party to act as mediator.
Could creditors seize assets or force an auction for state assets if those creditors were unsecured?
You have any interesting hypothetical scenarios regarding an insolvent state?

Could CalculatedRisk become a bank holding company?

Newbie 101 (profile) wrote on Thu, 5/14/2009 - 10:56 pm
That some of the smartest people in the world are not thinking about their children and grandchildren, hoping for something even grander for them, I don't believe.

yeah, rest assured they care... about their children and grandchildren. it's the ultimate triumph of DNA/genetic selfishness and social darwinism, if you think about it. their progeny is taken care of, in some cases for many generations to come. the progeny of the rest of us... not so much.

Yeah, we're going to hell in a hand basket and there ain't nuttin' we can do about it. I like coming here, I learn so much, but we do have a tendency to get ourselves all wound up. I agree with OnlineBrokerReview we all know the score. Let's do the best we can for ourselves and our families, and just sit back and watch the show. We can tell our grand kids we were there.

Rob Dawg (homepage, profile) wrote on Fri, 5/15/2009 - 4:37 am
Want to see some unhappy former civil servants? Wait until CalPERS gets folded into the PBGC.

The PBGC pay limit will hurt.

"you mean you are still married to that nerd..."

Vonbek777, just for you.

YouTube - Revenge of the Nerds - Ogre welcomes nerds

CR is a paradise for nerds.

ResistanceIsFeudal - Effin' bingo!

If you are going to mention Marianne Faithfull (Mick's chick) then a Mars bar and its use (think Clinton and cigars ) has to be mentioned. Some ancient late '60s tales, true or not, have to be kept alive.

-K

This is to be expected; many will want (and think they are entitled to) a bailout.

I mentioned this in my article, "Intervention's Potential Blindspots" which listed a variety of risks and unintended consequences of the various interventions, bailouts, etc.:

That article can be found here:

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