Perhaps the state should consider releasing all of its prisoners and giving each one a bus pass out of state. That would close 3/4 of the budget hole instantly.
If California gets a bailout, I want one too. One for every body, every animal, every thing for any reason you can come up with. We will be so rich then.
Stop everyone please with the "revenue" solutions. There is no amount of revenue that can fill the spending hole that is California. This is a spending problem plain and simple.
CA hemoraging frorm jugular and femoral arteries, and the blood bank is out of stock.
Maybe Arnuld should issue an executive order saying all federal withholding taxes must be diverted to the CA treasury, under threat of being put in one of their numerous prisons with all those friendly guards.
lawyerliz (profile) wrote on Wed, 6/10/2009 - 3:09 pm
You think they will really cut spending dawg?
Yes but perhaps not how you think. It will be interesting. There are two competing forces at work. The Feds want to weaken states rights. The citizens want nothing more than to be free of unresponsive governance. Truth is there will be less spending because there is no more money for even this much spending.
What is going to happen? I'm curious for the same reason I was curious to see what Obama would do as president. Or the same reason I like that test video of the jet smashing into the concrete well. Morbid curiosity, I guess. What does happen when a state runs out of money? Time to find out.
A small cut of Indian casino gaming is nothing compared to the money that drives across the Nevada border every day.
Of course I'm not serious about doing it. As Rob Dawg says, we have a spending problem (in that it grows to whatever level of revenues), not a revenue problem.
Nevertheless, we do send an awful lot of money into the Nevada desert, which never gets spent here. You can't stop folks from sinning, but if we could do all our gambling, drinking, etc. here in Cali, then we could:
(a) tax the hell out of it in-state!
(b) as a bonus, cut gas usage and eliminate the need for a bullet train!
You ALL know the federal government is going to step in and save the day. If they can't allow a bank to fail, or an auto company, you really think they are going to let Cali go down the tubes?
Now stop slacking off and get back to work, we here in Cali need you to send us part of your paycheck.
In my culdesac, leaving out the rental houses, 80% of the new homeowners are city fire, county sherriff, or other flavor of emergency services. The other 20% are a judge, a handful of financial serior managers, and a tenured prof. We had a block party over memorial day and I got to hear some folks take their hair down for a bit. They seemed to feel the prison system grossly overpays for marginal skills. The perception I got was that if they saw a prison guard changing a tire on the side of the street, they'd swerve into them.
WestSac_grrl (profile) wrote on Wed, 6/10/2009 - 3:25 pm
In my culdesac, leaving out the rental houses, 80% of the new homeowners are city fire, county sherriff, or other flavor of emergency services. The other 20% are a judge, a handful of financial serior managers, and a tenured prof. We had a block party over memorial day and I got to hear some folks take their hair down for a bit. They seemed to feel the prison system grossly overpays for marginal skills. The perception I got was that if they saw a prison guard changing a tire on the side of the street, they'd swerve into them.
That's interesting. My neighborhood of productive non-government types feel the same about city firemen, county sheriffs, judges, financial serior managers, and tenured profs.
"Stop everyone please with the "revenue" solutions. There is no amount of revenue that can fill the spending hole that is California. This is a spending problem plain and simple."
You know we disagree here. They made it hard to tax, but not to spend. The public piled on with endless bond propositions that were presented to them in the '70s, '80s, and '90s as special interests discovered the right way to go around the legislature. The people voted themselves a free lunch, and politicians maintained the fiction for 30 years. When pols cut taxes, they cheered. When nobody balanced the books, they didn't notice.
I don't see how the things that happened, in the end, couldn't have happened. When you get to a system the size of California, it's not about individual virtue or moral failings; it's about dynamics between power blocks, and what the system incents the players to do or avoid doing.
Gee, in neither Miami-Dade nor Brevard do people feel that way.
They don't like cops so much, especially when they are giving traffic tickets,
but it's not something people obsess or talk about a whole lot. It wouldn't
be a big topic of conversation at a block party.
How bad business is yes, how low can house prices go, yes, where
are the space workers gonna go yes.
lawyerliz (profile) wrote on Wed, 6/10/2009 - 6:32 pm
They don't like cops so much, especially when they are giving traffic tickets,
but it's not something people obsess or talk about a whole lot. It wouldn't
be a big topic of conversation at a block party.
People sure talk about it around here, as the fire fighters and cops have gamed the political system into bankruptcy.
Cops and other public sector security forces types are white entitlement recipients. They get to be the last vestige of the middle class, the last unionized workers in America, in exchange for being the judas goats who run everyone else up the slaughter-chute to serfdom. When everyone else is impoverished, they'll get the knife too, that's why the promises are all pensions -- unfunded obligations deliverable at a future date.
Within the last couple of weeks there were people on NPR who were saying how
if Cali were a country, it would be just fine. I mean, just a few billions in debt, etc,
how much does France owe?
Doesn't say much about the countries of the world, methinks.
We agree on how we got here, but that doesn't mean we can't come to our senses and reverse course. CA's problem is the same as Uncle Sam's -- sustainability. There is no way that the government growth rates could be continued, period, and THAT makes it a spending problem.
I've already kinda floated it around here, just seeing what the reaction will be. Folks here are violently opposed to a Cali bailout. If this is a representative reaction from the east coast, there won't be any publicly-approved funding for any further big bailouts, much less for states that have the power to tax/cut spending.
But tax increases, to a lesser degree spending cuts, seem to raise the possibility of a Reverse Okie phenomenon.
The only real option I see is for FDIC or Treasury to guarantee their debt.
Cali did it to themselves. Sorry being a Californian I can't help but laugh. Sad thing is they have wrecked Colorado government as well. The Demo Governor has made a mess and now they are trying to vote the Tabor amendment out so they can go back to uncontrolled spending and taxation just like Cali.
Can't California just get a 3.99% balance transfer good to November, 2010 from some credit card bank? Surely Aaarnold is good for it. Jeez. Easy call. I should be finance director or whatever that guy's title is! He probably gets paid the big bucks--oh, maybe he's not getting paid after July, oops.
LL - we had our share of vacant $600k+ homes that had side doors broken in. Just outside our gates is a very large parolee population in an area with a gang injuction. The locals are nervous.
lawyerliz (profile) wrote on Wed, 6/10/2009 - 6:37 pm
Firemen are still heros here.
I love the volunteer guys. Drink all the beer you want down at the clubhouse, guys.
The pros here are ahead of even the cops in bankrupting my locality. Mandatory minimum staffing requirements "for public safety" that are at odds with standard firehouse staffing, thus guaranteeing overtime, overtime allotted based on seniority, retirement pay based on late-career yearlies. A common scam with most of the costs pushed into the future.
Folks here are violently opposed to a Cali bailout.
Hell, folks here in CA are opposed. The only ones in favor are the ones whose paycheck is dependent upon it and the politicians their unions have bought and paid for.
ResistanceIsFeudal (profile) wrote on Wed, 6/10/2009 - 6:40 pm
Critical events and catastrophic failure. There will be no graceful degradation in such a complex and interconnected system as CA.
People don't get as jacked up as Cali without years of bad behavior. That means institutionalized maladministration.
Once you get a system good and crooked, so that rule has devolved into competition for spots at the feeding trough, you can't suddenly learn how to rule correctly overnight, even if you want to (and I'm sure they do).
Police / CHP writing tickets like there was no tomorrow (They are out in force right now ... Trying to justify their existance)
Firemen are cruising around in between calls looking for code violations (trying to 'look busy')
LA Building inspectors are wandering around looking at apartments/condos.(the rub is that they will write a citation for anything they find, charge $201 for wandering through a complex, LL has 60 days to correct violations, then $201 to write off the violations) They are very busy doing these random inspections.
Don't forget the raison d'être - local homeless man complains of tightness in chest at the local Walgreens - send a full-on fire pumper with a 6-man crew, and the EMS truck with another two... and make it fast! Oh, wait, just looking for a little attention... and a few bucks for something from Subway would be nice too...
do you really think 50+ electoral votes in Cali won't get their 75 billion
California has a population of 36M and 2 senators.
Wyoming has a population of 532K and 2 senators. Add South Dakota, Kansas, Nebraska, Oklahoma, Idaho, etc....
"You ALL know the federal government is going to step in and save the day. If they can't allow a bank to fail, or an auto company, you really think they are going to let Cali go down the tubes?"
Agreed. BHO will let them get to the edge, to strike a better deal. You know he wants to consolidate power in DC, it is hard to run a command-and-control economy with 50 independent states. So he is going to make them all a bit more dependent.
Lucifer (profile) wrote on Wed, 6/10/2009 - 5:42 pm
ResistanceIsFeudal,
Ever watched a bridge collapse, on TV?
Tacoma Narrows... we had a sort of pre-engineering class required of all aspiring engineering majors at my state uni. Very effective way to drill into future engineers the significance of the field. I'll never forget the first time I saw that.
edit: It should have been required viewing for financial engineers.
"California has a population of 36M and 2 senators.
Wyoming has a population of 532K and 2 senators. Add South Dakota, Kansas, Nebraska, Oklahoma, Idaho, etc.... "
Congress isn't going to get involved, there is plenty of money available between the Treasury and Fed to bail out CA or any other state. Geithner has all the TARP money back, and of course BB has the printing press.
Byzantine_Ruins (homepage, profile) wrote on Wed, 6/10/2009 - 5:46 pm
People don't get as jacked up as Cali without years of bad behavior. That means institutionalized maladministration.
Once you get a system good and crooked, so that rule has devolved into competition for spots at the feeding trough, you can't suddenly learn how to rule correctly overnight, even if you want to (and I'm sure they do).
Right. Self-reinforcing cycles of vice are just as resistant to change as virtuous cycles if not moreso.
This phenomemon, however it originated (see Century of the Self for the clearest take that I largely agree with), is now deep in the culture.
"if you think the feds will let the muni market die "
excellent point. many of our nation's wealthiest have almost every penny in munis - not a chance they go down without a fight.
what will be interesting in '09 is the fate of issues from municipalities like palmdale, lancaster, richmond, vallejo, and, of course oxnard... and in '10, big bad L.A., San Diego '11, San Jose etc etc... or perhaps I'm being an optimist in regards to the speed of collapse, and even places like Santa Monica will be trading with 30% coupons by Xmas...
It will be sad when coastline rights go up for sale - hopefully Geffen will invite Grover Norquist over for a nice surfin' clambake when that day comes...
BHO will let them get to the edge, to strike a better deal.
The administration would definitely be more interested than Congress, seeing as how it's their constituency about to get gutted.
Let'em try... it'll just accelerate the end-game. I'd be surprised if long rates didn't jump a few hundred basis points the day the bill gets signed (should that come to pass).
I never cease to be impressed with the clarity of Byz Ruins examination of our country. There is a paradox between his observations of the command and control government and his willingness to speak out on a public forum influencing or provoking many others.
Is free speech the last right to go to ensure any brave or foolhardy enough to speak will be given enough time to identify themselves? Is that too dark a future to imagine for our freedoms? I wish I knew.
California being rescued does seem to be at odds with the paygo rumblings coming out of Washington. Isn't rescuing California just prolonging the inevitable? Something somewhere in this country has to fail and my bet is on the taxpayer. Between taxes and the basics of surviving compounded by personal debt I do believe there is the chicken dinner winner.
ghostfaceinvestah (profile) wrote on Wed, 6/10/2009 - 5:49 pm
Agreed. BHO will let them get to the edge, to strike a better deal. You know he wants to consolidate power in DC, it is hard to run a command-and-control economy with 50 independent states. So he is going to make them all a bit more dependent.
Absolutely. The local versus state versus federal government power struggle never ends, and probably never will (or should). Fed will absolutely use the opportunity as a power grab and weaken the state/local/municipal resolve as long as it can. Strangely the FRB is doing something strikingly similar in a different theatre. I suspect this is also not coincidence.
To fix the cali budget problem we need to double the new-house tax credit AND have a new-car tax credit too That will stimulate the economy and get california going again. We need a furnature tax credit too.
Bill Clinton, for all his flaws, was a pragmatic and effective politician. When the bond market kicked him square in the nuts after he floated his healthcare and stimulus bills, he got the message and controlled spending (of course divided government and gridlocked helped). I don't think BHO has the same temperament. I am curious to see his reaction when/if Geitner comes to him one day and informs him of the market's refusal to fund his programs.
Sadly this is true.. but reality is not without a sense of irony.
//Cops and other public sector security forces types are white entitlement recipients. They get to be the last vestige of the middle class, the last unionized workers in America, in exchange for being the judas goats who run everyone else up the slaughter-chute to serfdom. When everyone else is impoverished, they'll get the knife too, that's why the promises are all pensions -- unfunded obligations deliverable at a future date.//
Externalized Costs (profile) wrote on Wed, 6/10/2009 - 6:56 pm
I never cease to be impressed with the clarity of Byz Ruins examination of our country. There is a paradox between his observations of the command and control government and his willingness to speak out on a public forum influencing or provoking many others.
In my previous life, I knew a few cops/deputies. These guys weren't raking in the dough. For the most part, their income was comparable to a truck driver or construction worker. But this was OH. Apparently things are different in CA. Also, very few speed traps on interstates in OH.
"More foolish optimism. Every state revenue projection to date has been so."
That matters not. I have this pile of cash sitting on the sidelines here. It's rotting, you see? I need to go long on something and this califiornia thing looks promising!
Usually, when Cali is in trouble, we get lots of U-hauls up the 5 to Oregon. But I'm not seeing that lately. Maybe they heard our unemployment is worse than theirs.
Lucifer (profile) wrote on Wed, 6/10/2009 - 6:02 pm
Would you stand under a financial instrument created by a financial engineer?
//It should have been required viewing for financial engineers.//
We already do. Engineering works because compliance with physical law is intrinsic to the practice. An engineering-level strength supporting a bad model of reality is like a super-advanced form of Voodoo practiced by genius witch-doctors. The fact that brilliant people practiced it doesn't in itself make the model apply to reality. This is the true hubris, and the real travesty to the common man
" I knew a few cops/deputies. These guys weren't raking in the dough"
Nuke - What a great idea. Fire all law enforcement and call in the national guard. Instant savings. Else, est. civil forces on a community level - any crime is repaid w/ immeidate justice...there solved a few other things like clogged courts, paying judges and civil servants, lots of lawyers out of work will be immense cost savings..
(Dawg and Byz you two were on a roll today thx for the thoughts and considerations...been way to busy to jump in).
The State of California needs to desolve into bankruptcy, and soon to follow the rest of the West Coast and the Northeast and Mid-Atlantic States. There is plenty of precedent and it is necessary.
Argentenia, Russia, Mexico, etc. have all gone into bankruptcy. Amazingly the world did not come to an end.
California, et al, have been living beyond their means for decades. The Tobacco Settlement monies they mortgaged so they could use it to support their extravagant expenditures. Their legislature is a non-functioning body that is incapable of living within its means. At what point in time do they realize they need to increase their taxes and drive away all those who can afford to pay them or reduce their spending?
"Hell, folks here in CA are opposed. The only ones in favor are the ones whose paycheck is dependent upon it and the politicians their unions have bought and paid for."
Exception here. Of course I'm not unionized, either.
What has to happen, has to happen; cut spending, abolish programs and (eventually, if the citizens don't like the state they have afterwards) changes in the tax structure -- and maybe even moving more revenue streams back to localities. Changing the mix of taxes, how much % revenue we get from each, who pays how much from each one (for what), and so on.
Without more taxes -- well, there's a lot of folks out there who say all we need is police, fire, and good roads. I don't think we'll even be able to handle that.
Oh yeah, and higher education in CA could use serious consolidation. There, I said it.
That matters not. I have this pile of cash sitting on the sidelines here. It's rotting, you see? I need to go long on something and this califiornia thing looks promising!
Read Chiang's letter--you might be interested in California's RAW deal.
I can't really see you being in favor of a bailout. You know as well as I do that a bailout is a temporary fix to a permanent problem, and we've had nothing but those for this past decade. The only way we fix things is to confront them, here and now.
scone (profile) wrote on Wed, 6/10/2009 - 7:07 pm reply Ignore user Usually, when Cali is in trouble, we get lots of U-hauls up the 5 to Oregon. But I'm not seeing that lately. Maybe they heard our unemployment is worse than theirs.
go to Uhaul.com and compare what it costs to rent a uhaul one way from CA to anywhere, and then run the anywhere to CA comp - it's always cheaper to rent back into CA, because no one wants back in!
I have to agree with Zach here.
Fed/treasury are going to have to backstop/guarantee some Cali debt. And it must be done with as much obfuscation as possible, to minimize the political fallout. Or perhaps they can securitize future tax revenues, allowing GS to take a cut of the proceeds? There's no other way to kick the can. Alternative is public unrest, and admission that the PLAN is not working.
"I can't really see you being in favor of a bailout. You know as well as I do that a bailout is a temporary fix to a permanent problem, and we've had nothing but those for this past decade. The only way we fix things is to confront them, here and now."
Uh, I better check what I wrote. I an emphatically not in favor of a federal bailout of any kind, nor further borrowing. Unless you think changing the current tax/revenue/revenue allocation system as a bailout.
Edit -- oh, when I said "exception here," I meant that I'm a state worker who's not in favor of a bailout.
nope, here's a little Bob Marley ... Babylon System:
We refuse to be
What you wanted us to be;
We are what we are:
That's the way (way) it's going to be. You don't know!
You can't educate I
For no equal opportunity:
(Talkin' 'bout my freedom) Talkin' 'bout my freedom,
People freedom (freedom) and liberty!
Yeah, we've been trodding on the winepress much too long:
Rebel, rebel!
Yes, we've been trodding on the winepress much too long:
Rebel, rebel!
Babylon system is the vampire, yea! (vampire)
Suckin' the children day by day, yeah!
Me say: de Babylon system is the vampire, falling empire,
Suckin' the blood of the sufferers, yea-ea-ea-ea-e-ah!
Building church and university, wo-o-ooh, yeah! -
Deceiving the people continually, yea-ea!
Me say them graduatin' thieves and murderers;
Look out now: they suckin' the blood of the sufferers (sufferers).
Yea-ea-ea! (sufferers)
Tell the children the truth;
Tell the children the truth;
Tell the children the truth right now!
Come on and tell the children the truth;
Tell the children the truth;
Tell the children the truth;
Tell the children the truth;
Come on and tell the children the truth.
'Cause - 'cause we've been trodding on ya winepress much too long:
Rebel, rebel!
And we've been taken for granted much too long:
Rebel, rebel now!
(Trodding on the winepress) Trodding on the winepress (rebel):
got to rebel, y'all (rebel)!
We've been trodding on the winepress much too long - ye-e-ah! (rebel)
Yea-e-ah! (rebel) Yeah! Yeah!
From the very day we left the shores (trodding on the winepress)
Of our Father's land (rebel),
We've been trampled on (rebel),
Oh now! (we've been oppressed, yeah!) Lord, Lord, go to ...
IIRC the U-haul people and their competitors used to give out a report on net inflows and outflows by state. I'd be interested to know whether they've reached 'all hands abandon ship' levels yet.
geithner has already stated that he doesn't have authority under the TARP to bailout California and that any rescue would have to come from Congress. BB has said something to that effect. of course, money is fungible so there's nothing preventing the government from giving California $24B in Medicaid rebates...
ResistanceIsFeudal (profile) wrote on Wed, 6/10/2009 - 4:24 pm
nope, here's a little Bob Marley ... Babylon System:
Right on but today too many Americans are too ignorant or complacent to take action.
I mean it's been 40+ yrs since the 1960's and US gov and media tactics learned a big lesson then i.e. CONTROL the unwashed masses
ResistanceIsFeudal (profile) wrote on Wed, 6/10/2009 - 4:24 pm
nope, here's a little Bob Marley ... Babylon System:
Right on but today too many Americans are too ignorant or complacent to take action.
I mean it's been 40+ yrs since the 1960's and US gov and media tactics learned a big lesson then i.e. CONTROL the unwashed masses
Yes and yes. I probably said these words before, but since 2001 we have become a fully-propagandized society.
June 10 (Bloomberg) -- California’s revenue collections for the first 11 months of the budget year fell $827 million short of Governor Arnold Schwarzenegger’s forecasts issued last month, the state controller said.
"While the severity of the shortfall has worsened since my last letter, the time available to correct our budget and cash deficits has not materially changed."
You know? Reading that letter was like watching an episode of Family Guy or The Simpsons. Who REALLY in their right mind names a financial instrument, particularly one that is so obviously a bad investment, RAW?
"June 10 (Bloomberg) -- California’s revenue collections for the first 11 months of the budget year fell $827 million short of Governor Arnold Schwarzenegger’s forecasts issued last month, the state controller said."
ResistanceIsFeudal (profile) wrote on Wed, 6/10/2009 - 4:30 pm
Yes and yes. I probably said these words before, but since 2001 we have become a fully-propagandized society.
Yup and I cringe on how bad it would be if we did not have 'the internet'. However only a very few % ( ? ) of Americans PROACTIVELY read, learn, and interact on blogs, twitter, other IM communication channels.
If Cali is smart, they'll levy a tax on the holders of foreclosed homes (banks). A very large tax. This will force the TBTF banks to fund the Cali deficit, and indirectly allow Cali to recapitalize through the Fed/Treasury/printing presses. Unintended consequences? ....maybe....
What's the possibility that some aggrieved denizen will bring a federal beef against the state for violation of some sort of equal-rights protection when things start getting really ugly? And what's the possibility that some federal judge will simply take it as his own duty to raise taxes to fix things?
i really wish people would stop venting their spleen on cops and fire fighters. there are virtual armies of drugged up filth that would love to kill a cop. you can even find "artists" that write "songs" where they fantasize about doing just that. anybody write any songs about killing you lately? fire fighters will chop through a burning roof to save your life. that's what they want to do. i'm sure everyone here would love to risk their life for a complete stranger. if you have ever been in a serious accident or know someone who has you might not think that 70k for a good fighter is a bad deal. can he/did he save a life? yes!
it isn't only about danger either because the level of professionalism and training tempers that somewhat -- that's why they don't die at the rate of say crab fisherman. it's about the essential role they play in our society. they are absolutely necessary. they should be well paid.
i'm really holding back here because i want to be respectful and non-combative but don't you think that there are more compelling targets to shoot at here?
how about the legions of useless admin people? presidents of nothing, vice-presidents of nothing, assistant vice-presidents of nothing. how about the mid-level accountants that get paid 65k a year to surf the internet with the eight other 65k a year mid-level accountants? and the it people? ha!
i don't think pres. Obama will let the situation get rally bad then save the day to get better terms in any deal. the pain felt by the average Californian while the situation gets really bad could.....repeat.....could.....get a lot of CA dems voted out of congress and/or senate. i don't think pres. wants less dems in congress. which is a likely result of a situation spinning out of control.
@ sneering nihilist (profile) wrote on Wed, 6/10/2009 - 4:36 pm
how about the legions of useless admin people? presidents of nothing, vice-presidents of nothing, assistant vice-presidents of nothing. how about the mid-level accountants that get paid 65k a year to surf the internet with the eight other 65k a year mid-level accountants? and the it people? ha!
start the chopping on the white collar necks!
The idea of bailing out California doesn't exactly make me feel all warm and fuzzy, but compare the cost bailing out the 8th largest economy in the world to bailing out an auto manufacturer. Just saying.
I wonder how the bond market would react to a CA bailout? That is the calculation that is probably going on the Treasury Dept. right now. That's why all the "paygo" trial balloons have been floated recently. You know it is bad when even CNBC starts to figure it out.:
U.S. Treasury prices fell Wednesday, sending benchmark yields up to 4.0 percent for the first time in eight months, after an auction of 10-year notes heightened concerns over the burgeoning U.S. budget deficit.
The problem with bailing out Cali is that it will set a precedent. Don't think that 49 other governors aren't watching how this soap opera plays out with a keen eye.
So while tossing California a few billion to kick the can down the road into 2010 sounds expedient, there are political and economic forces that make it problematic. The need for balanced budgets at the state level is the only restraint on their fiscal recklessness. And the entropy in state government exemplified by California is already spreading like a virus. Consider:
In NY the state legislature just had a revolt. Several Dems switched over to the GOP, handing effective control of the state senate to them. Chaos ensued, and nobody is really sure who controls the state senate.
In GA state tax collections continue to cliff dive. With the fiscal year ending June 30, and facing a shortfall, the governor tried to cram a 25% spending cut on the judicial branch. The judges pushed back, and the moronic compromise was to simply not pay vendors and contractors for one month. The state will begin 2010 in a huge hole, and if I were a contractor owed money I would slap late fees on these clowns.
"i really wish people would stop venting their spleen on cops and fire fighters. "
Being as I had a brother-in-law who was a fireman, I know how the system works, at least in California. Retirement is based on a percentage of your total earnings for your last X years on the job -- it varies. Many law enforcement officers (maybe all of them) go for all the overtime they can get their last few years on the job and, after calculations, retire ABOVE their base pay for the rest of their lives.
It's not in proportion to anything else that's happening in society right now. And when you call them on it, they get just a little too self-righteous, many of them, about all they do for the public.
Not my brother-in-law. He was happily cynical about it; admitted it was crap, took advantage of it anyway. Died a few years after he retired, but my sister is still drawing near-six-figures off his pension and will for many years to come. She's not working these days.
Max has a post that ties in nicely with this. Even if the recession didn't happen, CA still would have wound up billions in the hole based solely on planned spending.
sneering nihilist (profile) wrote on Wed, 6/10/2009 - 7:36 pm
i really wish people would stop venting their spleen on cops and fire fighters. there are virtual armies of drugged up filth that would love to kill a cop. you can even find "artists" that write "songs" where they fantasize about doing just that.
Capos in an open air prison camp that used to be a great country.
I would have loved to have been in the room during these talks: "let me see, Mr. Obama. You are here asking for money to save your economy while telling us how to ruin our own over some unproven theories about bituminous carbon. Why don't you go f... yourself."
"Climate talks between US, China break down
By Kathrin Hille in Beijing
Published: June 10 2009 17:05 | Last updated: June 10 2009 17:05
China and the US failed to achieve a breakthrough at their latest round of climate talks on Wednesday raising the stakes in the global effort to fight world climate change."
I really wish people would stop venting their spleen on cops and fire fighters
I have a lot of respect for the fire department, the coast guard, etc, when hell breaks loose they are running to the mess instead of away from it, even the police department and corrections officers do a job that I would really not want to do.
At the same time, how many military people do you see retiring set for life without a massive savings plan through their entire life?
Almost all of them have to do a second career after that, maybe Government service (it's a hard habit to break), or in the private sector. The issue that will break the U.S. bank is all of these unfunded pensions and benefits such as health care.
The more you regulate, the more sleazy accountants and lawyers join the feeding frenzy. Present company excluded of course.
Lucifer (profile) wrote on Wed, 6/10/2009 - 6:42 pm
Nope.. actually having a lot of fun.. it helps to be somewhat more in control of one's destiny than a wageslave.
//How do you find time to post between your job at the local 7/11 and driving the cab? Another bad day at the office with some bad White dude?//
Pride cometh before a fall, oh Lucifer. How much better to be a mortgaged homeowner building equity in an investment vehicle than a rent slave at the landlord's mercy?
Marshall Law by Jan 2010 in some areas
It's "martial" law, or if you prefer "marital" - B2
I thought he was being cleverly ironic-- comparing a California bailout to the Marshall Plan.
The military is facing many of the same issues vis-a-vis personnel costs as states such as CA. Since 2000, health care costs for the military (carried under the Tri-Care program) have increased over 260%. Part of this is due to the changing nature of the force. A volunteer, professional means more lifers, which in turn means more families and associated health/quality of life spending. The other problem is that no politician wants to be "against the troops", so ineffective and wasteful spending gets rammed through Congress "for the Troops". This, not the Taliban, will eventually break the back of the military. Personnel costs are the fastest growing expenditure in the DOD budget and will soon eclipse the cost of weapons/material. Believe me, there is a lot of high level concern over this issue at the highest levels.
I do not think the bond market will react well to California receiving or not receiving a bailout. On the one hand you have the fear that the federal government will not step in to help out a state. On the other hand you have moral hazard. Although on the moral hazard issue, one wonders what the difference is between this and the stimulus money the state was given or the assistance it received in previous recessions.
"If I wanted to destroy a nation," he wrote in 1966, "I would give it too much and I would have it on its knees, miserable, greedy and sick."
- John Steinbeck
TJ and The Bear
It's nothing against cops, fireman, etc. as an occupation, only against the unsustainable benefits afforded them.
other state employees get ridiculous benefits as well. maybe they are not quite as lucrative, but still extremely generous. i work for a large, very successful, private company and i think that our administrative structure is grossly overweight. i can only imagine the size of the government's admin waistline.
my bottom line, which i didn't make clear at all, was that we should chop the utterly useless people from the payroll first before we start tinkering with emergency services at all. start with admin. start with the internet surfers, water cooler chaters, etc. after culling them you can start firing the people that save lives and maintain order.
That is why I decided to change my ways many years ago.. I saw this thing coming. I was not sure about the intensity, rate of change in intensity or timing, but it was obvious.
Nihilist, who do you think pays for said cops to clean up the streets? And then pays them for 35 more years after their last day on the job?
the same people who pay the 22-year-old fighter who burned to death trying to help somebody. the same people who pay the 36-year-old cop that gets his brains sprayed on a sidewalk because he's wearing a uniform. i help pay their salary and don't mind at all.
"The problem with bailing out Cali is that it will set a precedent. Don't think that 49 other governors aren't watching how this soap opera plays out with a keen eye."
It's really not that complicated, CA and any other state gets bailed out by the Fed/Treasury, who in turn bails themselves out through inflating away the debt.
C'mon people, I know a lot of you are hoping for some massive failure to bail out your short positions, and I respect that, but how many times do you have to see the same pattern over and over again before you get it?
Nothing will be allowed to fail in the USSA today. There was an article today in the WSJ (or Bloomberg, forget which) about the auto suppliers asking for more money, on top of what they already got. Next up? The states? The airlines? Retailers? Who knows?
There is no way CA or any other state will be allowed to fail. It is just not going to happen.
It will all be loaded onto the shoulders of the Treasury, who will issue debt that the Fed will monetize. There is no other choice left.
I appreciate that California has major structural problems, but to be fair, a collapse in revenues of the magnitude that California has experienced would paralyze even the most politically homogenous and fiscally prudent state.
sneering nihilist (profile) wrote on Wed, 6/10/2009 - 7:52 pm
other state employees get ridiculous benefits as well. maybe they are not quite as lucrative, but still extremely generous.
What kind of argument is that? Everyone else is doing it? Well your country is bankrupt from top to bottom, so maybe it's time to think about budgeting from a perspective other than, giving money to people you like.
my bottom line, which i didn't make clear at all, was that we should chop the utterly useless people from the payroll first before we start tinkering with emergency services at all.
Because you have a bromantic crush on them, and lustily and vicariously thrill to their exploits and beating up social undesirables, they must be a real American hero. After all, they filled up all those prisons you can't afford with the libbo-negro-beaner-hippies.
start with admin. start with the internet surfers, water cooler chaters, etc. after culling them you can start firing the people that save lives and maintain order.?
Who protect and serve the bankers and lawyers that looted your country bare. Your nation is bankrupt, paco. B-A-N-K-R-U-P-T. It has NO MONEY. why don't you ask yourself how it got that way before you rubber stamp another big fat check you cannot possibly afford?
Take your flag lapel pin and stuff it up your ass, you're what's wrong with this country.
Oh, go read some CR inspired doom porn... Now complete with a soundtrack.
sample
“Okay. Fine.” I had seen enough movies to picture what was about to happen. I was gone. Moving low and as fast as I could; I made it to the bushes in about 2 nanoseconds. I looked back. Max was up on all fours puking. Then with one arm grabbing her leg to steady him, he staggered to his feet. She had him stumbling towards where I was but it wasn’t fast enough. I thought of the “Lord of the Rings” The black dinosaur looking things with the killer screams that the Kings rode on was what it reminded me of as it swooped over us. “Well this is fucked” I remember thinking. It kept going, but not far enough, it turned about 700 yards out, and then hovered in place. It was as if it was alive, watching, tensing its muscles for the leap. That was a mistake. We didn’t have Stingers but Gardener had the Barrett.
I don't think anyone seriously is out to screw cops. But some of the pay and benefits are outrageous, and easy to manipulate. I am in the military, I see a similar pattern every day. Sure, a lot of servicemen put their lives at risk under difficult conditions. In calender year 2008, I spent 34 days in home port. The rest was underway/shipyard. Doesn't mean I have a right to game the system and bankrupt the government. At the end of the day, we are all citizens, regardless of our employment.
June 10 (Bloomberg) -- The Federal Reserve unveiled its most detailed picture yet of its record $1 trillion expansion of credit, as Chairman Ben S. Bernanke responds to congressional pressure for greater transparency from the central bank.
For the first time, the Fed announced details on the number of borrowers and the ratings of securities pledged as collateral for loans. The data come in a new monthly report released by the central bank today in Washington.
The Fed said a total of 378 banks borrowed from its discount window in May or got funds from auctions of cash aimed at combating the liquidity crisis. Officials still stopped short of identifying the firms, a measure called for by some lawmakers and the subject of freedom-of-information requests and lawsuits.
Yes, but the devil is in the details. Notice how nobody in DC is talking about CA, let alone clamoring to send money? Again, it's a no win situation, so they've got to figure out a way to do it without getting crucified by the bond vigilantes.
"a collapse in revenues of the magnitude that California has experienced would paralyze even the most politically homogenous and fiscally prudent state."
~~~
More states will be lining up ...
The bubble effected the entire economy, every state ...
Bond Girl (homepage, profile) wrote on Wed, 6/10/2009 - 5:02 pm
I appreciate that California has major structural problems, but to be fair, a collapse in revenues of the magnitude that California has experienced would paralyze even the most politically homogenous and fiscally prudent state.
You have that exactly opposite. The collapse in revenues is/was precisely because California is neither conservative nor prudent.
//"The problem with bailing out Cali is that it will set a precedent. Don't think that 49 other governors aren't watching how this soap opera plays out with a keen eye."//
It should have been required viewing for financial engineers.
As a real engineer, BSEE, I resent the very existence of the phrase "financial engineers". Those weren't engineers in any sense of the word - they were criminals who used math for obfuscation. They all belong in jail, with very "friendly" cellmates.
"According to an internal memo prepared by the committee's Republican staff, Paulson and Bernanke "put a gun to the head" of Lewis and Bank of America's board of directors to force the merger even though Lewis "felt it was his duty to his shareholders to try his luck in the legal system and back out of the deal."
Charlatan is a better description for those douchebags.. "financial engineers".. my foot
//As a real engineer, BSEE, I resent the very existence of the phrase "financial engineers". Those weren't engineers in any sense of the word - they were criminals who used math for obfuscation. They all belong in jail, with very "friendly" cellmates.//
I am tired of ivy league BS.. but republican BS is even worser.
//"According to an internal memo prepared by the committee's Republican staff, Paulson and Bernanke "put a gun to the head" of Lewis and Bank of America's board of directors to force the merger even though Lewis "felt it was his duty to his shareholders to try his luck in the legal system and back out of the deal."//
You really think the Treasury or Fed is going to save CA? The only remotely similar situation I can think of is NYC in 1975. But an out of control state? Maybe if they make the terms very painful. Nothing but pain for CA for the next few years no matter what happens.
bobn (homepage, profile) wrote (in reply to...) on Wed, 6/10/2009 - 7:09 pm
It should have been required viewing for financial engineers.
As a real engineer, BSEE, I resent the very existence of the phrase "financial engineers". Those weren't engineers in any sense of the word - they were criminals who used math for obfuscation. They all belong in jail, with very "friendly" cellmates.
As a real engineer (sadly, I'm not) you can understand how the math can be perfect, and the product still utterly wrong if management handed you incomplete or outright fraudulent specifications. Some really brilliant folks were involved in this crime, those trained to follow instructions and not ask questions, or those too cynical to care about the impact of what they were doing. Well, here we have their Tacoma Narrows, do we not?
Lucifer (profile) wrote on Wed, 6/10/2009 - 8:08 pm
Does it matter? Almost every state is broke..
I think we're going to have around 40-45 states in various forms of insolvency / distress. Probably some of the flyovers that basically never had anything will continue to have the same nothing. Everywhere else is going to get a look at how little is really left of America when you drain the hot air out.
// Some really brilliant folks were involved in this crime, those trained to follow instructions and not ask questions, or those too cynical to care about the impact of what they were doing. //
mmckinl (profile) wrote on Wed, 6/10/2009 - 5:07 pm
"a collapse in revenues of the magnitude that California has experienced would paralyze even the most politically homogenous and fiscally prudent state."
More states will be lining up ...
The bubble effected the entire economy, every state ...
Obama and his Wall St bought and paid for economic team putting all their chips on the Banking Oligarchs to pump up great chunks of the Big Shitpile that's essentially worthless unless the peak real estate values of the bubble can be miraculously restored is going to be their undoing and rightly so !
The degree of dysfunction in Cali Government is simply not believable unless you have really looked at it,and even then...I can honestly say the majority of crack whores are more functional than the government here,city,county and state.
Nemo, If you are out there. Very good bond post. I only had to read parts of it twice to understand it. Much better than my usual "My god this hurts!" followed by closing the window.
BOSTON (MarketWatch) -- In the past year, improbable financial events became all too real, calling into question some commonly-held beliefs about retirement planning -- and forcing a closer look at software tools that use probability models as a basis for helping people prepare for retirement.
These days, savers, retirees and advisers are looking in the rearview mirror, questioning the value of software that failed to live up to its billing. Likewise, firms -- perhaps validating the notion that such software failed -- are rolling out new versions of their retirement-planning tools in hopes of meeting the needs of savers in a world where nothing is guaranteed.
that's not what i said or meant. cuts need to be made. lets start with the useless shit(white and blue collar) then work our way up to useful people(again white and blue), and shitcan them last. why not leave emergency services last? we have to disassemble this thing with some kind of plan right?
i don't "lustily and vicariously thrill to their exploits" either but you are a beautiful writer.
"libbo-negro-beaner-hippies" those are my favorite kind of hippies! let them out! let them out!
"Take your flag lapel pin and stuff it up your ass, you're what's wrong with this country." -- that hurt, man. and i don't do the lapel pin thing.
Absolutely. What choice do they have? Let unionized workers lose their fat pensions? Have CA cut back social programs or education?
I think they do have a choice here to force responsibility on CA. The moral hazard of shoveling money at CA is the same or worse as with the banks. We shall see.
Frederick Hyeck (sp?) coined the term "scientism" to refer to the budding financian engineers of his day.
Scientism: Using scientific terminology and models to incorrectly and inacurately describe social systems and phenomena.
The new behaviorism is taking over as a paradigm of choice in most of the "softer" side of hard science. Definitely dominant in MIS at the highest levels of research publications.
"Lacker added that Bernanke "also intends to make clear that if they play that card and they need assistance, management is gone," Lacker wrote. BofA is based in Charlotte, N.C., which is in Lacker's district."
Seems pretty clear to me, regardless of who released it.
software engineering technically is not even engineering my the strictest dfinition of the word. I think generally it has to apply to something that produces a physical product.
That said, any generally accepted engeinering field involves using math and science to basically design a system that is at equilibirium. such as the forces on a bridge. the resources of a given system etc.
Financial engineers are just really really bad at modeling and understanding their system. I would liken them to a programmer who likes to create infinite loops a lot. Throw in the money and greed and commissions and i'm sure some of them saw the consequences but just looked the other way figuring it didnt matter anyway. Most engineering schools actually require you to take an ethics course. I had to take one and i'm a software developer. I mean what if i write software that I know will cause the brakes of an airplane to fail every 100 days.
The fact of the matter is wall street probably knew it would lead to this (just like jamie dimon saying the party would end when the dancing stopped, he knew the party would lead to disaster) but they didn't care anyway. So at the root of it, wall street just has no ethics. Because someone knew it would happen, and they brushed it aside, becuase of their greed.
For some reason, I seem to remember at the beginning of the year California officials saying that they would not need to do another short-term borrowing like they did last fall because the state received so much from the stimulus....
//For some reason, I seem to remember at the beginning of the year California officials saying that they would not need to do another short-term borrowing like they did last fall because the state received so much from the stimulus//
John Chiang is a voice of reason in a dysfunctional system. The governor has remained "optimistic" for far too long. Now congress, under severe pressure, is going to have to pass a new budget with the required 2/3 rd majority .... I can only imagine the political pressure that will be applied as everyone uses state bankruptcy as leverage to keep their constituent's pet projects.
The only hope is some leadership on the budget side. Every department should be required to produce a reduced budget, that rolls into a balanced budget. Congress can evaluate the suggested cuts, make some changes if necessary, but a certain % cut across the board would be a good starting point.
ghostfaceinvestah -
Oh, don't get me wrong, I don't doubt it for a minute.
My point was it does not matter until it does. This has been in the breeze for a while, but until the Justice Department indites BB, its much ado about nothing. We live in interesting times, and I still say the "men in black" have been co-opted by the PPT!
June 11 (Bloomberg) -- Japan’s economy shrank at a record 14.2 percent annual pace last quarter as exports and business investment plummeted.
The contraction in gross domestic product was smaller than the 15.2 percent estimated last month, revised figures from the Cabinet Office showed today in Tokyo. The fourth quarter contraction was revised to 13.5 percent from 14.4 percent.
The french nobility also believed that they had a hereditary rights to not pay taxes, even when france was bankrupt.
//It's from an entrenched 'executive class' who can't manage a business to save their lives. But make sure they're well compensated for being worthless.//
The fact of the matter is wall street probably knew it would lead to this (just like jamie dimon saying the party would end when the dancing stopped, he knew the party would lead to disaster) but they didn't care anyway. So at the root of it, wall street just has no ethics. Because someone knew it would happen, and they brushed it aside, becuase of their greed.
Interesting irony of life, isn't it? The people with the power made enough "funny" money to literally change the world, and had it been plowed back into the society none of us would have been the wiser and they could have lived extremely well, and even been looked upon as benefactors of society. Instead they appropriated themselves a king's ransom and decided to start their own universes as they played keep-up-with-the-billionaire-joneses.
There's 2 million Federal employees, at least 1/2 of whom have no power, brains or training.
There are 20 million households underwater.
At least 13 million unemployed.
The System only holds together because of payoffs to large # of the middle class.
When that stops, Feds only have two options - large-scale weapons that they can't use in the U.S. or small-scale, one-on-one deployments. They're not designed for anything else.
I hadn't seen that news about the guy in D.C. until an hour ago.
Pretty interesting, he essentially attacked the Federal Reserve back in 1983.
I had to take ethics seminars in engineering school. Leads to some interesting discussions wrt working for defense contractors. When I took some higher lever econ courses in college, I was shocked by the modeling they used to describe real world markets. Mostly it was simple differential equations. These models have difficulty describing simple oscillators (they break down when you move outside a relatively small range of motion or introduce more complicated forcing functions, springs start to exhibit non-linear characteristics when you stretch them too much). Having seen that, I was less surprised by the financial meltdown when it happened.
Ha - funny, from the retirement software link:
Said Sharry: "There is no silver bullet."
I thought that was the retirement plan for around half of the baby boomers dealing with rising medical cost.
Kauai_Kahuna (homepage, profile) wrote on Wed, 6/10/2009 - 7:34 pm
Ha - funny, from the retirement software link:
Said Sharry: "There is no silver bullet."
I thought that was the retirement plan for around half of the baby boomers dealing with rising medical cost.
"There is no silver bullet" ought to be the mantra of every educated human being on the planet.
bureaucrats are useful? bureaucrats without accountability are worse than useless.
Bureaucrats are essential to ensure that things don't get done. I'd even venture to say that along with attorneys they effectively function as the conscience of a corporate or government body.
This was not snark. Many's the time in my former company that an honest and hard-working bureaucrat kept someone--usually a gung-ho officer or salesperson--from cutting a corner that would have been fatal. They're essential to a functioning control system, especially at financial institutions. You might prefer to trust the individual consciences of your employees but you will always make at least one mistake in hiring.
A co-worked once said.. "The weapons systems I worked on only killed bad people."
Cool, how did he program the three laws of robots into them and change them to only work on bad people?
Are most idiots that blatant? Most of the ones I know hide it better.
broward (homepage, profile) wrote on Wed, 6/10/2009 - 7:33 pm
There's 2 million Federal employees, at least 1/2 of whom have no power, brains or training.
There are 20 million households underwater.
At least 13 million unemployed.
The System only holds together because of payoffs to large # of the middle class.
Yes. It's all held together by payola among a coalition of willing participants in an extortion racket. There's little to no loyalty once the financial incentive is removed, in fact there is outright distaste in many cases. So, it's a network which will start looking like the duct tape and twine it really is, soon enough.
mmckinl wrote:
"The moral hazard of shoveling money at CA is the same or worse as with the banks. "
~~
NO EFFING WAY !
My reasoning is that as bad as the banks are, they are easier to control than a state. If CA gets Fed money without painful strings attached, what incentive is there to fix the seriously broken CA budget process? What incentive is there for any state to reign in spending? I could, of course, be completely wrong.
It is ironic that this system was created through free choice. None made them act like greedy pigs, they CHOSE it.
//Yes. It's all held together by payola among a coalition of willing participants in an extortion racket. There's little to no loyalty once the financial incentive is removed, in fact there is outright distaste in many cases. So, it's a network which will start looking like the duct tape and twine it really is, soon enough.//
If CA gets Fed money without painful strings attached, what incentive is there to fix the seriously broken CA budget process?
Abosolutely none.
What incentive is there for any state to reign in spending?
Also none.
I could, of course, be completely wrong.
No, you are correct. CA is going bankrupt and they still can't reign in the spending. They're like an insane shop-a-holic with a slew of credit cards !! Gotta spend ! spend ! spend ! spend !
I think it kind of depends on how they go about providing the assistance. Providing some sort of liquidity facility (after all, that is what we are talking about here) is not as bad as an explicit guarantee on longer-term debt or a reinsurance program.
Comrade Coinz (homepage, profile) wrote on Wed, 6/10/2009 - 7:45 pm
My reasoning is that as bad as the banks are, they are easier to control than a state. If CA gets Fed money without painful strings attached, what incentive is there to fix the seriously broken CA budget process? What incentive is there for any state to reign in spending? I could, of course, be completely wrong.
There is no incentive to fix things. By design. Just to keep it going at any cost. If it collapses the magnitude of the deception would become known, and even the most propagandized, brainwashed, improperly-educated, fluoride-treated, satellite-mind-controlled mass-media-programmed, behaviorally-conditioned masses will be rioting in the streets and sharpening the guillotine blades.
Please correct me if I'm wrong, but the loan to Cali was to float the unemployed benefits.
May I point out that many people from many states go to Cali to file unemployment because the benefits are high. So in a way, I can see where this is a National issue, and not just the state.
Of course a lot of people have been complaining about the outflow of California people moving to their areas and bringing down the property values also, so.....
I think that's how some folks would justify it to themselves, in something of a tongue in cheek way.
However anyone who pays taxes and lives in the states is supporting the military machine. The way to resolve that would be to not pay a percentage of taxes which would be allocated to the military. Then not pay a percentage of the fines levied or serve the jail time like a true stalwart of the cause. Otherwise by their unwillingness to make the personal sacrifices they're just enabling the IMC.
Senator Bernie Sanders, the Vermont independent who sponsored an April 2 resolution that urged the Fed to identify borrowers and passed by a 20-vote margin, said today’s Fed report is “completely insufficient.” “It is time for the Fed to name names,” Sanders said in a statement. The money “belongs to the American people,” and disclosure would show whether banks that are repaying the government’s capital injections are getting loans from the Fed, the senator said.
Lucifer (profile) wrote on Wed, 6/10/2009 - 7:47 pm
It is ironic that this system was created through free choice. None made them act like greedy pigs, they CHOSE it.
There was a funky radical back a few millenia ago who had some interesting things to say about the children of the devil, and the powers of the prince of this world, if I remember my religious propaganda correctly. Something about choice was in there too, I believe.
"Interesting irony of life, isn't it? The people with the power made enough "funny" money to literally change the world, and had it been plowed back into the society none of us would have been the wiser and they could have lived extremely well, and even been looked upon as benefactors of society. Instead they appropriated themselves a king's ransom and decided to start their own universes as they played keep-up-with-the-billionaire-joneses."
Not accurate at all. While it is true that the banksters earned obscene incomes and bonuses, it was NOT these bonuses themselves that actually affected the economy. Even if they had made normal wages, it would not prevented the problem we are seeing.
The cause of this depression was the credit bubble that preceded it. The federal reserve and the federal government made poor policy decisions which allowed individuals, corporations, and government to increase their levels of debt to unsustainable levels. This increase in debt caused every producer of goods and services in the world economy to mistakenly believe that there was a strongly increasing demand for their goods and services. As a result, every shopkeeper, Chinese toy manufacturer, nail salon owner, auto manufacturer, home builder, real estate office, etc, built up far more capacity than would have been required if the level of debt had remained constant in the economy. The effects of loose credit were astonishingly pervasive and affected every corner and crevice in the economy to an absolutely amazing degree. I would have never believed it if I had not been watching it unfold every day here on CR!
"Senator Bernie Sanders, the Vermont independent who sponsored an April 2 resolution that urged the Fed to identify borrowers and passed by a 20-vote margin, said today’s Fed report is “completely insufficient.” “It is time for the Fed to name names,” Sanders said in a statement."
The only irony is he was asking the CFTC or someone to find who was driving up oil prices.
He is going to soon realize that it is none other than BB, through his debasement of the dollar.
A note about the CA state government plan to take a couple of billion in property tax revenue from the counties and cities. According to the interpretation of high level city officials I know, the state can only borrow the money. Also, they must pay if back within 3 years and cannot take local property tax revenues again until the original loan is paid back. So, it is a one time hit that must be paid back relatively quickly.
GFI, USdollar is as far out of BB hands as the bond market is....
BB will not throw in the towel, he'll throw hellasious at this till the mint is overcome with hefty and cumbersome 401k withdrawls to purchase the silver and gold coinage... you actually pay no penalty for this move, you pays the taxes but there are no pennies for penalties.
We saw this last year as the mint shut down production....a mint failure is worse than a bond failure.
Yes, you could look at it that way. More mature cities actually have pretty flat revenue since prop 13 kept taxes well below market value. What is hurting those cities is lower sales tax revenue.
One Bilderberger said that, “the banks themselves don't know the answer to when the bottom will be hit.” Everyone appeared to agree, “that the level of capital needed for the American banks may be considerably higher than the US government suggested through their recent stress tests.”
Further, “someone from the IMF pointed out that its own study on historical recessions suggests that the US is only a third of the way through this current one; therefore economies expecting to recover with resurgence in demand from the US will have a long wait.” One attendee stated that, “Equity losses in 2008 were worse than those of 1929,” and that, “The next phase of the economic decline will also be worse than the '30s, mostly because the US economy carries about $20 trillion of excess debt.
Until that debt is eliminated, the idea of a healthy boom is a mirage.
But the MSM, the pundits, the economist assclowns, and Obamanomics all say recovery is just ahead with many green shoots springing up
o.jeff (profile) wrote on Wed, 6/10/2009 - 7:56 pm
Not accurate at all. While it is true that the banksters earned obscene incomes and bonuses, it was NOT these bonuses themselves that actually affected the economy. Even if they had made normal wages, it would not prevented the problem we are seeing.
I wasn't claiming so much that the stellar bonuses/salaries themselves were the contributing factor, but rather that this money earned was spent stupidly or plowed back into the speculative financial system instead of invested with the intent to create or facilitate real economic growth. Credit then would be a more accurate representation of an attainable future state. That's where the false signal comes in. The "wealth effect" of asset inflation took over and credit was confused with wealth. The money was, and is, real, at least on paper. But eventually someone has to try and cash the checks. Create real productive growth, and the "real economy" catches up to the credit, which is supposed to be the idea behind credit and loans, not conspicuous consumption, which has no future value. Do that, and the scam could be prolonged for a very long time.
sneering nihilist (profile) wrote on Wed, 6/10/2009 - 8:20 pm
that's not what i said or meant. cuts need to be made. lets start with the useless shit(white and blue collar) then work our way up to useful people(again white and blue), and shitcan them last. why not leave emergency services last? we have to disassemble this thing with some kind of plan right?
Because the system has a vastly overdeveloped security component that has no purpose other than to meet an artificial need. We have a "war on terror" and a "war on drugs" that have created a security-prison complex that is backed by propaganda about how necessary it is. We make criminals, and chase them, for no purpose other than to have criminals to chase. It's a deliberate play on your emotions to keep you in fear and heedless of critics of the state. So in short, those guys ARE the first layer of fat.
Also, the state is much too large and there needs to be an across-the-board cut, with no playing favorites. Rationalizing budgets has to come from a zero basis, not an emotional one. We have this much money and we have very many needs to meet. Feeding the hungry, fixing the streetlights enforcing weights and measures, they are all just as essential, so there can't be a "place" to start, because this can't be a little trim around the edges, the pie needs set down and cut up anew, with everyone getting a smaller slice and learning to deal with it.
i don't "lustily and vicariously thrill to their exploits" either but you are a beautiful writer.
Thanks. I've made a living with it.
that hurt, man. and i don't do the lapel pin thing.
Nothing personal but it should hurt. Your country is bankrupt and not just one part of it, but the federal, state and local components. How can I "hate" the boys in blue? Well, they're a bunch of double-dipping pension gamers who get promotions based on filling up prisons with non-violent offenders and keep the cam going by playing on people's fear and respect. It's contemptible no matter what their job is.
Also, they're predominantly right-wing tools of the shallowest sort, who cheerfully smashed the face of anyone who spoke out against the Iraq war or the abuses of the Bush administration in general, then made a spreadsheet entry about how they were a politically unreliable domestic terrorist. They enabled a domestic tyrant who inflicted profound and lasting damage on the American political mechanism. That's also contemptible because it's naked politics conducted under the fig leaf of public security. It's not just my prejudice, cops are reactionaries, in every time and place, from the Jajaweed in Sudan (primarily off-duty cops) to the guys who raped and killed Chinese in Indonesia under Suharto (cops and their cronies) to the enforcers of political order in al-Basra (Shi'ite good ole boy cops, I had a friend who used to chow with them -- they had a fervent willingness to take care of any Sunni problems in their area real good) to the Alabama State Troopers of the Sovereignty Commission period.
You need to get serious about just who these people are, what their role in your society is, and what the real costs of having them around is. Its awesome they look out for people in trouble -- not so awesome when you compare the documented difference between the police response to, say, a missing person report filed on a 23 year old white girl and a 23 year old black girl, but it's something -- but that's just one aspect of who they are and what they do. If all you see is "hey, this guy is out there looking out for me and you" you are seeing just one aspect of the situation, and importantly, you are seeing the aspect of the situation that is deliberately proffered to you to excite a calculated emotional response.
Thats a seriously last resort. My little birds tell me that the Big O is scared spitless of possible military violence is keeping the soldiers out of county for that reason.
Eras End,
Tell us again how CA suffers from a lack of revenue? It's so damned funny every time I hear it.
Time for another round of layoffs, it appears.
Got pigged.
I am trying to buy a Chinese drywall house so I can have Walstreetpro2 smash it up.
craigslist | Page Not Found
looking for our bit of gubmint cheese
really, we learned it from the banksters
Illiquid AND insolvent.
Perhaps the state should consider releasing all of its prisoners and giving each one a bus pass out of state. That would close 3/4 of the budget hole instantly.
No problem, just make the lottery bigger every year and borrow from future revenues.
If need be, start opening state-operated casinos so that we don't need to drive to Las Vegas. Keep all the gambling revenues in state!
If California gets a bailout, I want one too. One for every body, every animal, every thing for any reason you can come up with. We will be so rich then.
Twilight zone music.
Da DA da Da DADADADA. . . .
You were asking about odds, Liz?
ShortCourage,
The state already gets a cut of the Indian gaming.
We are all screwed now. . .
Stop everyone please with the "revenue" solutions. There is no amount of revenue that can fill the spending hole that is California. This is a spending problem plain and simple.
CA hemoraging frorm jugular and femoral arteries, and the blood bank is out of stock.
Maybe Arnuld should issue an executive order saying all federal withholding taxes must be diverted to the CA treasury, under threat of being put in one of their numerous prisons with all those friendly guards.
Cash is overrated. Wait, is this inflationary?
You think they will really cut spending dawg?
lawyerliz (profile) wrote on Wed, 6/10/2009 - 6:09 pm
You think they will really cut spending dawg?
States in this crisis situation typically spend ever-increasing sums until they are abruptly pulled up short by an absolute lack of cash.
The shooter is 88. Maybe he is just senile.
Even if he is a denier, why wait til now to shoot?
lawyerliz (profile) wrote on Wed, 6/10/2009 - 6:11 pm
The shooter is 88. Maybe he is just senile.
Even if he is a denier, why wait til now to shoot?
88 = HH = Heil Hitler.
Maybe they can sell off Catalina Island
So the S will hit the F in 50 days? Unpaid guards to hold prisioners hostage?
To fan out and kidnap bystanders for ransom?
Oops, are we violating CR's rule?
Or just discussing the news?
LawyerLiz,
At that age he could have been a state-side part of the Hitler Youth, still waiting for the return of the Reich.
lawyerliz (profile) wrote on Wed, 6/10/2009 - 3:09 pm
You think they will really cut spending dawg?
Yes but perhaps not how you think. It will be interesting. There are two competing forces at work. The Feds want to weaken states rights. The citizens want nothing more than to be free of unresponsive governance. Truth is there will be less spending because there is no more money for even this much spending.
Are they out of dollars and pesos ?
Ministry of Truth (profile) wrote on Wed, 6/10/2009 - 3:13 pm
Maybe they can sell off Catalina Island
Jeez, they just got finished stealing Santa Rosa Island.
This is not as flippant as it seems. Much of CA is State and Federal land. Part of the problem IMO.
So they weaken state's rights by not giving them money?
Or by giving them money?
Not giving the money might strengthen the states by forcing them to
be responsible and behave.
It's gonna suck to be poor, young, old, or disabled in Cali. The unionized state workers wont feel any pain.
What is going to happen? I'm curious for the same reason I was curious to see what Obama would do as president. Or the same reason I like that test video of the jet smashing into the concrete well. Morbid curiosity, I guess. What does happen when a state runs out of money? Time to find out.
TJ and the Bear,
A small cut of Indian casino gaming is nothing compared to the money that drives across the Nevada border every day.
Of course I'm not serious about doing it. As Rob Dawg says, we have a spending problem (in that it grows to whatever level of revenues), not a revenue problem.
Nevertheless, we do send an awful lot of money into the Nevada desert, which never gets spent here. You can't stop folks from sinning, but if we could do all our gambling, drinking, etc. here in Cali, then we could:
(a) tax the hell out of it in-state!
(b) as a bonus, cut gas usage and eliminate the need for a bullet train!
Oh come on people...
You ALL know the federal government is going to step in and save the day. If they can't allow a bank to fail, or an auto company, you really think they are going to let Cali go down the tubes?
Now stop slacking off and get back to work, we here in Cali need you to send us part of your paycheck.
A use for the prison guards:
They will seize & occupy Federal Lands!
Florida is not anywhere near this bad off, and is actually cutting.
Why should we send our money to Cali.
Fill up the empty houses with prisoners and prison guards.
Condominiumize the prisons.
The unionized state workers wont feel any pain.
They're already getting hit locally.
If Cali is backstopped, everyone else must as well, or there will be capital flight.
Why should we send our money to Cali.
Same reason we should send our money to the banks.
In my culdesac, leaving out the rental houses, 80% of the new homeowners are city fire, county sherriff, or other flavor of emergency services. The other 20% are a judge, a handful of financial serior managers, and a tenured prof. We had a block party over memorial day and I got to hear some folks take their hair down for a bit. They seemed to feel the prison system grossly overpays for marginal skills. The perception I got was that if they saw a prison guard changing a tire on the side of the street, they'd swerve into them.
I will be out of money in 50 days too. (I can arrange it that way) Send me money!!
I will spend it in worthwhile-er ways, too.
We are all California now!
Nope, I am all Florida now!!
WestSac_grrl (profile) wrote on Wed, 6/10/2009 - 3:25 pm
In my culdesac, leaving out the rental houses, 80% of the new homeowners are city fire, county sherriff, or other flavor of emergency services. The other 20% are a judge, a handful of financial serior managers, and a tenured prof. We had a block party over memorial day and I got to hear some folks take their hair down for a bit. They seemed to feel the prison system grossly overpays for marginal skills. The perception I got was that if they saw a prison guard changing a tire on the side of the street, they'd swerve into them.
That's interesting. My neighborhood of productive non-government types feel the same about city firemen, county sheriffs, judges, financial serior managers, and tenured profs.
My neighborhood of hungry neo-savages feels the same way about productive non-government types.
"Stop everyone please with the "revenue" solutions. There is no amount of revenue that can fill the spending hole that is California. This is a spending problem plain and simple."
You know we disagree here. They made it hard to tax, but not to spend. The public piled on with endless bond propositions that were presented to them in the '70s, '80s, and '90s as special interests discovered the right way to go around the legislature. The people voted themselves a free lunch, and politicians maintained the fiction for 30 years. When pols cut taxes, they cheered. When nobody balanced the books, they didn't notice.
I don't see how the things that happened, in the end, couldn't have happened. When you get to a system the size of California, it's not about individual virtue or moral failings; it's about dynamics between power blocks, and what the system incents the players to do or avoid doing.
Gee, in neither Miami-Dade nor Brevard do people feel that way.
They don't like cops so much, especially when they are giving traffic tickets,
but it's not something people obsess or talk about a whole lot. It wouldn't
be a big topic of conversation at a block party.
How bad business is yes, how low can house prices go, yes, where
are the space workers gonna go yes.
My neighborhood of woodland gatherers resents your neighborhood's barborous carnivorism.
California needs to secede ....
All the money we send to the red, welfare states, could stay here ...
We'd be rolling in dough ...
carousel! carousel!
No doubt. I hadn't heard of this infighting before. I did find it odd that a police officer could maintain a house just as nice a county judge.
lawyerliz (profile) wrote on Wed, 6/10/2009 - 6:32 pm
They don't like cops so much, especially when they are giving traffic tickets,
but it's not something people obsess or talk about a whole lot. It wouldn't
be a big topic of conversation at a block party.
People sure talk about it around here, as the fire fighters and cops have gamed the political system into bankruptcy.
Cops and other public sector security forces types are white entitlement recipients. They get to be the last vestige of the middle class, the last unionized workers in America, in exchange for being the judas goats who run everyone else up the slaughter-chute to serfdom. When everyone else is impoverished, they'll get the knife too, that's why the promises are all pensions -- unfunded obligations deliverable at a future date.
Within the last couple of weeks there were people on NPR who were saying how
if Cali were a country, it would be just fine. I mean, just a few billions in debt, etc,
how much does France owe?
Doesn't say much about the countries of the world, methinks.
Assets = Liabilities + Equity
=IF(AND(Assets<0,CashFlow<0,),Bailout^2,Taxes*2)
Cops make big bucks, mostly from a lot of overtime.
RENEW! RENEW!
You know we disagree here.
Bob,
We agree on how we got here, but that doesn't mean we can't come to our senses and reverse course. CA's problem is the same as Uncle Sam's -- sustainability. There is no way that the government growth rates could be continued, period, and THAT makes it a spending problem.
Firemen are still heros here.
I've already kinda floated it around here, just seeing what the reaction will be. Folks here are violently opposed to a Cali bailout. If this is a representative reaction from the east coast, there won't be any publicly-approved funding for any further big bailouts, much less for states that have the power to tax/cut spending.
But tax increases, to a lesser degree spending cuts, seem to raise the possibility of a Reverse Okie phenomenon.
The only real option I see is for FDIC or Treasury to guarantee their debt.
Byzantine_Ruins (homepage, profile) wrote on Wed, 6/10/2009 - 5:11 pm
States in this crisis situation typically spend ever-increasing sums until they are abruptly pulled up short by an absolute lack of cash.
Critical events and catastrophic failure. There will be no graceful degradation in such a complex and interconnected system as CA.
Well, it's been fun, but I'm leaving.
Cali did it to themselves. Sorry being a Californian I can't help but laugh. Sad thing is they have wrecked Colorado government as well. The Demo Governor has made a mess and now they are trying to vote the Tabor amendment out so they can go back to uncontrolled spending and taxation just like Cali.
What is POIC upto nowadays.. apart from using a different profile.
Can't California just get a 3.99% balance transfer good to November, 2010 from some credit card bank? Surely Aaarnold is good for it. Jeez. Easy call. I should be finance director or whatever that guy's title is! He probably gets paid the big bucks--oh, maybe he's not getting paid after July, oops.
mmckinl,
We'll take back our defense spending and CA will be even toastier than it is now. CA benefited enormously from federal defense investment.
LL - we had our share of vacant $600k+ homes that had side doors broken in. Just outside our gates is a very large parolee population in an area with a gang injuction. The locals are nervous.
The only real option I see is for FDIC or Treasury to guarantee their debt.
Both of these require Congressional authorization. no way flyover senators agree to bailout Cali without extracting their own pounds of flesh.
lawyerliz (profile) wrote on Wed, 6/10/2009 - 6:37 pm
Firemen are still heros here.
I love the volunteer guys. Drink all the beer you want down at the clubhouse, guys.
The pros here are ahead of even the cops in bankrupting my locality. Mandatory minimum staffing requirements "for public safety" that are at odds with standard firehouse staffing, thus guaranteeing overtime, overtime allotted based on seniority, retirement pay based on late-career yearlies. A common scam with most of the costs pushed into the future.
ResistanceIsFeudal,
Ever watched a bridge collapse, on TV?
Both of these require Congressional authorization. no way flyover senators agree to bailout Cali without extracting their own pounds of flesh.
Right, which is the reason for my position that, if we do Cali's, every state's debt has to be federally-backed.
Folks here are violently opposed to a Cali bailout.
Hell, folks here in CA are opposed. The only ones in favor are the ones whose paycheck is dependent upon it and the politicians their unions have bought and paid for.
if AIG, Citi and BofA get over 250 billion, do you really think 50+ electoral votes in Cali won't get their 75 billion
come on, think!
ResistanceIsFeudal (profile) wrote on Wed, 6/10/2009 - 6:40 pm
Critical events and catastrophic failure. There will be no graceful degradation in such a complex and interconnected system as CA.
People don't get as jacked up as Cali without years of bad behavior. That means institutionalized maladministration.
Once you get a system good and crooked, so that rule has devolved into competition for spots at the feeding trough, you can't suddenly learn how to rule correctly overnight, even if you want to (and I'm sure they do).
Kung.Fu.Panda
mmckinl,
We'll take back our defense spending and CA will be even toastier than it is now. CA benefited enormously from federal defense investment.
~~~~
Cali will just become an arms exporter ...
Even with defense spending in Cali we send more in than we get back ...
Our local "heroes" in So Cal are...
Police / CHP writing tickets like there was no tomorrow (They are out in force right now ... Trying to justify their existance)
Firemen are cruising around in between calls looking for code violations (trying to 'look busy')
LA Building inspectors are wandering around looking at apartments/condos.(the rub is that they will write a citation for anything they find, charge $201 for wandering through a complex, LL has 60 days to correct violations, then $201 to write off the violations) They are very busy doing these random inspections.
CA Tax dollars at work...
~miser
actually, if it is between higher taxes and gubmint cheese, why wouldn't we take the money and run?
this is prisoner's dilemma straight and simple - play or be played
"A common scam "
Don't forget the raison d'être - local homeless man complains of tightness in chest at the local Walgreens - send a full-on fire pumper with a 6-man crew, and the EMS truck with another two... and make it fast! Oh, wait, just looking for a little attention... and a few bucks for something from Subway would be nice too...
montas ankle,
It's not the 50 votes that CA has, it's the 385 they don't.
do you really think 50+ electoral votes in Cali won't get their 75 billion
California has a population of 36M and 2 senators.
Wyoming has a population of 532K and 2 senators. Add South Dakota, Kansas, Nebraska, Oklahoma, Idaho, etc....
Cali could sell their nuclear know-how to Iran, for peaceful purposes only, of course.
if the Feds allow CA to fall, every muni market in the country falls apart - plain and simple
we can argue over whether this is a reasonable outcome, but the fact that it IS the outcome is not under debate
if you think the feds will let the muni market die - think again
Cali is just the beginning ...
Actually the rust belt was the beginning ...
Now it is spreading ...
Just watch tax receipts in all the states plummet ... fed too ...
"You ALL know the federal government is going to step in and save the day. If they can't allow a bank to fail, or an auto company, you really think they are going to let Cali go down the tubes?"
Agreed. BHO will let them get to the edge, to strike a better deal. You know he wants to consolidate power in DC, it is hard to run a command-and-control economy with 50 independent states. So he is going to make them all a bit more dependent.
OT: another reminder that Big Brother is watching, in case you haven't seen it: THOMAS MITCHELL: Subpoena seeks names -- and lots more -- of Web posters - Opinion - ReviewJournal.com
Lucifer (profile) wrote on Wed, 6/10/2009 - 5:42 pm
ResistanceIsFeudal,
Ever watched a bridge collapse, on TV?
Tacoma Narrows... we had a sort of pre-engineering class required of all aspiring engineering majors at my state uni. Very effective way to drill into future engineers the significance of the field. I'll never forget the first time I saw that.
edit: It should have been required viewing for financial engineers.
"California has a population of 36M and 2 senators.
Wyoming has a population of 532K and 2 senators. Add South Dakota, Kansas, Nebraska, Oklahoma, Idaho, etc.... "
Congress isn't going to get involved, there is plenty of money available between the Treasury and Fed to bail out CA or any other state. Geithner has all the TARP money back, and of course BB has the printing press.
Byzantine_Ruins (homepage, profile) wrote on Wed, 6/10/2009 - 5:46 pm
People don't get as jacked up as Cali without years of bad behavior. That means institutionalized maladministration.
Once you get a system good and crooked, so that rule has devolved into competition for spots at the feeding trough, you can't suddenly learn how to rule correctly overnight, even if you want to (and I'm sure they do).
Right. Self-reinforcing cycles of vice are just as resistant to change as virtuous cycles if not moreso.
This phenomemon, however it originated (see Century of the Self for the clearest take that I largely agree with), is now deep in the culture.
"if you think the feds will let the muni market die "
excellent point. many of our nation's wealthiest have almost every penny in munis - not a chance they go down without a fight.
what will be interesting in '09 is the fate of issues from municipalities like palmdale, lancaster, richmond, vallejo, and, of course oxnard... and in '10, big bad L.A., San Diego '11, San Jose etc etc... or perhaps I'm being an optimist in regards to the speed of collapse, and even places like Santa Monica will be trading with 30% coupons by Xmas...
It will be sad when coastline rights go up for sale - hopefully Geffen will invite Grover Norquist over for a nice surfin' clambake when that day comes...
This crap (bailout, QE, etc) works until it doesn't. Just look at the UK in the late 1970's. The bond market will have the last word.
The US is going Japanese ...
but with 25%+ U6 ...
Cali, Michigan, Ohio, Oregon ... just the beginning
Coming to a state near you !
Nuke (profile) wrote on Wed, 6/10/2009 - 6:54 pm
This crap (bailout, QE, etc) works until it doesn't. Just look at the UK in the late 1970's. The bond market will have the last word.
The fat lady appears to be off in the wings spritzing her throat spray going "me me me me".
BHO will let them get to the edge, to strike a better deal.
The administration would definitely be more interested than Congress, seeing as how it's their constituency about to get gutted.
Let'em try... it'll just accelerate the end-game. I'd be surprised if long rates didn't jump a few hundred basis points the day the bill gets signed (should that come to pass).
it looks like the number got less negative from April to June, which is less bad. now, how do I buy california stock? anyone know the symbol?
I never cease to be impressed with the clarity of Byz Ruins examination of our country. There is a paradox between his observations of the command and control government and his willingness to speak out on a public forum influencing or provoking many others.
Is free speech the last right to go to ensure any brave or foolhardy enough to speak will be given enough time to identify themselves? Is that too dark a future to imagine for our freedoms? I wish I knew.
California being rescued does seem to be at odds with the paygo rumblings coming out of Washington. Isn't rescuing California just prolonging the inevitable? Something somewhere in this country has to fail and my bet is on the taxpayer. Between taxes and the basics of surviving compounded by personal debt I do believe there is the chicken dinner winner.
ghostfaceinvestah (profile) wrote on Wed, 6/10/2009 - 5:49 pm
Agreed. BHO will let them get to the edge, to strike a better deal. You know he wants to consolidate power in DC, it is hard to run a command-and-control economy with 50 independent states. So he is going to make them all a bit more dependent.
Absolutely. The local versus state versus federal government power struggle never ends, and probably never will (or should). Fed will absolutely use the opportunity as a power grab and weaken the state/local/municipal resolve as long as it can. Strangely the FRB is doing something strikingly similar in a different theatre. I suspect this is also not coincidence.
"the situation has not improved"
Chiang must be lying
Krugman said everything will be fine by end of summer
"Is free speech the last right to go to ensure any brave or foolhardy enough to speak will be given enough time to identify themselves?"
Free speech! Hahaha! Damn, man. Too funny.
Banksters love war ...
economic or military ... doesn't matter ...
Cali is going down so Obama's buddies can
glean the carcass ...
To fix the cali budget problem we need to double the new-house tax credit AND have a new-car tax credit too That will stimulate the economy and get california going again. We need a furnature tax credit too.
Bill Clinton, for all his flaws, was a pragmatic and effective politician. When the bond market kicked him square in the nuts after he floated his healthcare and stimulus bills, he got the message and controlled spending (of course divided government and gridlocked helped). I don't think BHO has the same temperament. I am curious to see his reaction when/if Geitner comes to him one day and informs him of the market's refusal to fund his programs.
CR - I'm having trouble understanding why this is relevant. CA is TBTF
Sadly this is true.. but reality is not without a sense of irony.
//Cops and other public sector security forces types are white entitlement recipients. They get to be the last vestige of the middle class, the last unionized workers in America, in exchange for being the judas goats who run everyone else up the slaughter-chute to serfdom. When everyone else is impoverished, they'll get the knife too, that's why the promises are all pensions -- unfunded obligations deliverable at a future date.//
it looks like the number got less negative from April to June
More foolish optimism. Every state revenue projection to date has been so.
Would you stand under a financial instrument created by a financial engineer?
//It should have been required viewing for financial engineers.//
Externalized Costs (profile) wrote on Wed, 6/10/2009 - 6:56 pm
I never cease to be impressed with the clarity of Byz Ruins examination of our country. There is a paradox between his observations of the command and control government and his willingness to speak out on a public forum influencing or provoking many others.
Some may suffer and some may burn
But I know that one day my people will learn
As sure as the sun shines, way up in the sky
Today I stand here a victim, the truth is I'll never die
In my previous life, I knew a few cops/deputies. These guys weren't raking in the dough. For the most part, their income was comparable to a truck driver or construction worker. But this was OH. Apparently things are different in CA. Also, very few speed traps on interstates in OH.
"More foolish optimism. Every state revenue projection to date has been so."
That matters not. I have this pile of cash sitting on the sidelines here. It's rotting, you see? I need to go long on something and this califiornia thing looks promising!
Usually, when Cali is in trouble, we get lots of U-hauls up the 5 to Oregon. But I'm not seeing that lately. Maybe they heard our unemployment is worse than theirs.
Lucifer (profile) wrote on Wed, 6/10/2009 - 6:02 pm
Would you stand under a financial instrument created by a financial engineer?
//It should have been required viewing for financial engineers.//
We already do. Engineering works because compliance with physical law is intrinsic to the practice. An engineering-level strength supporting a bad model of reality is like a super-advanced form of Voodoo practiced by genius witch-doctors. The fact that brilliant people practiced it doesn't in itself make the model apply to reality. This is the true hubris, and the real travesty to the common man
" I knew a few cops/deputies. These guys weren't raking in the dough"
Nuke - What a great idea. Fire all law enforcement and call in the national guard. Instant savings. Else, est. civil forces on a community level - any crime is repaid w/ immeidate justice...there solved a few other things like clogged courts, paying judges and civil servants, lots of lawyers out of work will be immense cost savings..
(Dawg and Byz you two were on a roll today thx for the thoughts and considerations...been way to busy to jump in).
Byz-
Excellent rejoinder. The issue we have as a people is the majority has zero realization they are subjugated.
Nuke,
The place to watch out for uniforms is Texas. They all feel like they're Sheriff Buford T. Justice of Portague County.
The State of California needs to desolve into bankruptcy, and soon to follow the rest of the West Coast and the Northeast and Mid-Atlantic States. There is plenty of precedent and it is necessary.
Argentenia, Russia, Mexico, etc. have all gone into bankruptcy. Amazingly the world did not come to an end.
California, et al, have been living beyond their means for decades. The Tobacco Settlement monies they mortgaged so they could use it to support their extravagant expenditures. Their legislature is a non-functioning body that is incapable of living within its means. At what point in time do they realize they need to increase their taxes and drive away all those who can afford to pay them or reduce their spending?
Has anyone seen "Michael" ? I wonder if he was the guy at the DC shooting? He had a alot of Obama rage.
should I be rethinking Disneyland with the kids this summer???
c&c owes me a new keyboard.
There's no magic bullet ...
Raising 30 billion in taxes would crush Cali's economy ...
Not that it won't get crushed anyway ...
If Obama intercedes bond yields go higher
guaranteeing a new plummet in housing prices ...
~~~~
We need "Greenbacks" ... spent right into the economy ...
"Hell, folks here in CA are opposed. The only ones in favor are the ones whose paycheck is dependent upon it and the politicians their unions have bought and paid for."
Exception here. Of course I'm not unionized, either.
What has to happen, has to happen; cut spending, abolish programs and (eventually, if the citizens don't like the state they have afterwards) changes in the tax structure -- and maybe even moving more revenue streams back to localities. Changing the mix of taxes, how much % revenue we get from each, who pays how much from each one (for what), and so on.
Without more taxes -- well, there's a lot of folks out there who say all we need is police, fire, and good roads. I don't think we'll even be able to handle that.
Oh yeah, and higher education in CA could use serious consolidation. There, I said it.
NYS State Troopers are the worst. Along the thruway they are staged every 5-10 miles ticketing aggressively. Average yearly salary is 100K +.
"Firemen are still heros here."
Therefore we should bankrupt the state to make them wealthy in their retirement. Makes sense to me.
"Therefore we should bankrupt the state to make them wealthy in their retirement. Makes sense to me. "
AMEN BROTHER!!!! AMEN!
If we cut their pay 50%, there would still be plenty of people looking for this job
That matters not. I have this pile of cash sitting on the sidelines here. It's rotting, you see? I need to go long on something and this califiornia thing looks promising!
Read Chiang's letter--you might be interested in California's RAW deal.
CC = AA degrees or vocational school
SCU = 4 yr uni
UC = grad school
Why double and triple up?
Bob Marley Don't Worry Be Happy ( excerpts )
In every life we have some trouble
When you worry you make it double
Don't worry, be happy......
Ain't got no place to lay your head
Somebody came and took your bed
Don't worry, be happy
The land lord say your rent is late
He may have to litigate
Don't worry, be happy
Ain't got no cash, ain't got no style
Ain't got not girl to make you smile
But don't worry be happy
Bob Dobbs,
I can't really see you being in favor of a bailout. You know as well as I do that a bailout is a temporary fix to a permanent problem, and we've had nothing but those for this past decade. The only way we fix things is to confront them, here and now.
Update on the AIG building sale: my source (CRE distressed fund analyst) spoke to the buyer today and it was actually $86/sq foot.
scone (profile) wrote on Wed, 6/10/2009 - 7:07 pm reply Ignore user Usually, when Cali is in trouble, we get lots of U-hauls up the 5 to Oregon. But I'm not seeing that lately. Maybe they heard our unemployment is worse than theirs.
go to Uhaul.com and compare what it costs to rent a uhaul one way from CA to anywhere, and then run the anywhere to CA comp - it's always cheaper to rent back into CA, because no one wants back in!
KM4, that's Bobby McFerrin, not Bob Marley.
crispyandcole,
Yep, I have a nephew who spent years working towards (and waiting) to become a fireman.
There is a huge oversupply of qualified applicants, all grabbing for that brass ring.
Same people that scream about contract law for bankruptcy ...
Scream about cutting Public Servants pay under contract ...
Property trumps people ... wrong ...
~~~~
They BOTH need to be rationalized ...
Nuke (profile) wrote on Wed, 6/10/2009 - 4:03 pm
speed traps on interstates in OH.
You're kidding, right? The whole state is a speed trap.
California will probably be "rescued" by a new Federal insurer of muni-bonds. It is the cheapest way to kick the can down the road.
Byzantine_Ruins (homepage, profile) wrote on Wed, 6/10/2009 - 4:18 pm
KM4, that's Bobby McFerrin, not Bob Marley.
You're right - I just did a quick web search and grabbed first hit
Arthur_500 (profile) wrote on Wed, 6/10/2009 - 4:09 pm
Argentenia, Russia, Mexico, etc. have all gone into bankruptcy. Amazingly the world did not come to an end.
I assume you haven't been to any of those countries lately.
I have to agree with Zach here.
Fed/treasury are going to have to backstop/guarantee some Cali debt. And it must be done with as much obfuscation as possible, to minimize the political fallout. Or perhaps they can securitize future tax revenues, allowing GS to take a cut of the proceeds? There's no other way to kick the can. Alternative is public unrest, and admission that the PLAN is not working.
"I can't really see you being in favor of a bailout. You know as well as I do that a bailout is a temporary fix to a permanent problem, and we've had nothing but those for this past decade. The only way we fix things is to confront them, here and now."
Uh, I better check what I wrote. I an emphatically not in favor of a federal bailout of any kind, nor further borrowing. Unless you think changing the current tax/revenue/revenue allocation system as a bailout.
Edit -- oh, when I said "exception here," I meant that I'm a state worker who's not in favor of a bailout.
nope, here's a little Bob Marley ... Babylon System:
We refuse to be
What you wanted us to be;
We are what we are:
That's the way (way) it's going to be. You don't know!
You can't educate I
For no equal opportunity:
(Talkin' 'bout my freedom) Talkin' 'bout my freedom,
People freedom (freedom) and liberty!
Yeah, we've been trodding on the winepress much too long:
Rebel, rebel!
Yes, we've been trodding on the winepress much too long:
Rebel, rebel!
Babylon system is the vampire, yea! (vampire)
Suckin' the children day by day, yeah!
Me say: de Babylon system is the vampire, falling empire,
Suckin' the blood of the sufferers, yea-ea-ea-ea-e-ah!
Building church and university, wo-o-ooh, yeah! -
Deceiving the people continually, yea-ea!
Me say them graduatin' thieves and murderers;
Look out now: they suckin' the blood of the sufferers (sufferers).
Yea-ea-ea! (sufferers)
Tell the children the truth;
Tell the children the truth;
Tell the children the truth right now!
Come on and tell the children the truth;
Tell the children the truth;
Tell the children the truth;
Tell the children the truth;
Come on and tell the children the truth.
'Cause - 'cause we've been trodding on ya winepress much too long:
Rebel, rebel!
And we've been taken for granted much too long:
Rebel, rebel now!
(Trodding on the winepress) Trodding on the winepress (rebel):
got to rebel, y'all (rebel)!
We've been trodding on the winepress much too long - ye-e-ah! (rebel)
Yea-e-ah! (rebel) Yeah! Yeah!
From the very day we left the shores (trodding on the winepress)
Of our Father's land (rebel),
We've been trampled on (rebel),
Oh now! (we've been oppressed, yeah!) Lord, Lord, go to ...
Here it comes, folks--the federalization of the State of California--the first of many.
We need to understand that the Democrats actually like this turn of events, as it allows for the shredding of the Constitution they so deeply resent.
IIRC the U-haul people and their competitors used to give out a report on net inflows and outflows by state. I'd be interested to know whether they've reached 'all hands abandon ship' levels yet.
geithner has already stated that he doesn't have authority under the TARP to bailout California and that any rescue would have to come from Congress. BB has said something to that effect. of course, money is fungible so there's nothing preventing the government from giving California $24B in Medicaid rebates...
ResistanceIsFeudal (profile) wrote on Wed, 6/10/2009 - 4:24 pm
nope, here's a little Bob Marley ... Babylon System:
Right on but today too many Americans are too ignorant or complacent to take action.
I mean it's been 40+ yrs since the 1960's and US gov and media tactics learned a big lesson then i.e. CONTROL the unwashed masses
km4 (profile) wrote on Wed, 6/10/2009 - 6:28 pm
ResistanceIsFeudal (profile) wrote on Wed, 6/10/2009 - 4:24 pm
nope, here's a little Bob Marley ... Babylon System:
Right on but today too many Americans are too ignorant or complacent to take action.
I mean it's been 40+ yrs since the 1960's and US gov and media tactics learned a big lesson then i.e. CONTROL the unwashed masses
Yes and yes. I probably said these words before, but since 2001 we have become a fully-propagandized society.
aaahhhhh, CA cries wolf all the time. they said the same crap 6 mo's ago, 4 mo's ago, 3 mo's ago. same poop different month.
Already getting $12B for CA Medicaid from Federal "Stimulus":
http://www.pe.com//imagesdaily/2009/02-05/stimulus05_grf_1000.jpg
On Topic:
June 10 (Bloomberg) -- California’s revenue collections for the first 11 months of the budget year fell $827 million short of Governor Arnold Schwarzenegger’s forecasts issued last month, the state controller said.
California Revenue Trails Forecast by $827 Million (Update1) - Bloomberg.com
"While the severity of the shortfall has worsened since my last letter, the time available to correct our budget and cash deficits has not materially changed."
RUN FOR YOUR LIVES!!!!!!!!!!
You know? Reading that letter was like watching an episode of Family Guy or The Simpsons. Who REALLY in their right mind names a financial instrument, particularly one that is so obviously a bad investment, RAW?
"June 10 (Bloomberg) -- California’s revenue collections for the first 11 months of the budget year fell $827 million short of Governor Arnold Schwarzenegger’s forecasts issued last month, the state controller said."
Nuke, had you read the letter...
ResistanceIsFeudal (profile) wrote on Wed, 6/10/2009 - 4:30 pm
Yes and yes. I probably said these words before, but since 2001 we have become a fully-propagandized society.
Yup and I cringe on how bad it would be if we did not have 'the internet'. However only a very few % ( ? ) of Americans PROACTIVELY read, learn, and interact on blogs, twitter, other IM communication channels.
If Cali is smart, they'll levy a tax on the holders of foreclosed homes (banks). A very large tax. This will force the TBTF banks to fund the Cali deficit, and indirectly allow Cali to recapitalize through the Fed/Treasury/printing presses. Unintended consequences? ....maybe....
What's the possibility that some aggrieved denizen will bring a federal beef against the state for violation of some sort of equal-rights protection when things start getting really ugly? And what's the possibility that some federal judge will simply take it as his own duty to raise taxes to fix things?
It happened in St. Louis not too many years ago.
Not to worry ...
By Dec the whole country will be in a financial crisis ...
Just watch the tax revenue nose dive ...
Watch Wall Street hit its "oh shit" moment ...
50/50 ... Marshall Law by Jan 2010 in some areas ...
i really wish people would stop venting their spleen on cops and fire fighters. there are virtual armies of drugged up filth that would love to kill a cop. you can even find "artists" that write "songs" where they fantasize about doing just that. anybody write any songs about killing you lately? fire fighters will chop through a burning roof to save your life. that's what they want to do. i'm sure everyone here would love to risk their life for a complete stranger. if you have ever been in a serious accident or know someone who has you might not think that 70k for a good fighter is a bad deal. can he/did he save a life? yes!
it isn't only about danger either because the level of professionalism and training tempers that somewhat -- that's why they don't die at the rate of say crab fisherman. it's about the essential role they play in our society. they are absolutely necessary. they should be well paid.
i'm really holding back here because i want to be respectful and non-combative but don't you think that there are more compelling targets to shoot at here?
how about the legions of useless admin people? presidents of nothing, vice-presidents of nothing, assistant vice-presidents of nothing. how about the mid-level accountants that get paid 65k a year to surf the internet with the eight other 65k a year mid-level accountants? and the it people? ha!
start the chopping on the white collar necks!
Marshall Law by Jan 2010 in some areas
It's "martial" law, or if you prefer "marital"
"Watch Wall Street hit its "oh shit" moment ..."
meanwhile, there are an awful lot of green shoots among the headlines on bloomie right now.
i don't think pres. Obama will let the situation get rally bad then save the day to get better terms in any deal. the pain felt by the average Californian while the situation gets really bad could.....repeat.....could.....get a lot of CA dems voted out of congress and/or senate. i don't think pres. wants less dems in congress. which is a likely result of a situation spinning out of control.
@ sneering nihilist (profile) wrote on Wed, 6/10/2009 - 4:36 pm
how about the legions of useless admin people? presidents of nothing, vice-presidents of nothing, assistant vice-presidents of nothing. how about the mid-level accountants that get paid 65k a year to surf the internet with the eight other 65k a year mid-level accountants? and the it people? ha!
start the chopping on the white collar necks!
Here Here ...a lot of dead wood there !
The idea of bailing out California doesn't exactly make me feel all warm and fuzzy, but compare the cost bailing out the 8th largest economy in the world to bailing out an auto manufacturer. Just saying.
"Lucifer (profile) wrote on Wed, 6/10/2009 - 3:41 pm What is POIC upto nowadays.. apart from using a different profile. "
Still here, don't post much as most of what is posted nowadays is not worthwhile to read and reply to (such as the above comment)
How do you find time to post between your job at the local 7/11 and driving the cab? Another bad day at the office with some bad White dude?
Ouch. Sheesh.
Basel Too
Marshall Law by Jan 2010 in some areas
It's "martial" law, or if you prefer "marital"
~~~~
ooops ...
Martial Law by Jan 2010 in some areas ...
I wonder how the bond market would react to a CA bailout? That is the calculation that is probably going on the Treasury Dept. right now. That's why all the "paygo" trial balloons have been floated recently. You know it is bad when even CNBC starts to figure it out.:
Treasury Holds 'Awful' Auction: 10-Year Yield Hits 3.95% - Bonds and Treasuries * US * News * Story - CNBC.com
U.S. Treasury prices fell Wednesday, sending benchmark yields up to 4.0 percent for the first time in eight months, after an auction of 10-year notes heightened concerns over the burgeoning U.S. budget deficit.
sneering nihilist,
It's nothing against cops, fireman, etc. as an occupation, only against the unsustainable benefits afforded them.
"As Willie Sutton the bank robber said when asked why he robbed banks, 'because that's where the money is'."
The problem with bailing out Cali is that it will set a precedent. Don't think that 49 other governors aren't watching how this soap opera plays out with a keen eye.
So while tossing California a few billion to kick the can down the road into 2010 sounds expedient, there are political and economic forces that make it problematic. The need for balanced budgets at the state level is the only restraint on their fiscal recklessness. And the entropy in state government exemplified by California is already spreading like a virus. Consider:
In NY the state legislature just had a revolt. Several Dems switched over to the GOP, handing effective control of the state senate to them. Chaos ensued, and nobody is really sure who controls the state senate.
In GA state tax collections continue to cliff dive. With the fiscal year ending June 30, and facing a shortfall, the governor tried to cram a 25% spending cut on the judicial branch. The judges pushed back, and the moronic compromise was to simply not pay vendors and contractors for one month. The state will begin 2010 in a huge hole, and if I were a contractor owed money I would slap late fees on these clowns.
Marshall Law by Jan 2010 in some areas
It's "martial" law, or if you prefer "marital" - B2
I thought he was being cleverly ironic-- comparing a California bailout to the Marshall Plan.
Nope.. actually having a lot of fun.. it helps to be somewhat more in control of one's destiny than a wageslave.
//How do you find time to post between your job at the local 7/11 and driving the cab? Another bad day at the office with some bad White dude?//
RockyR
"meanwhile, there are an awful lot of green shoots among the headlines on bloomie right now."
~~~~
Yep, the media is fully on board the propaganda parade ...
green shoots = crashing more slowly ...
"i really wish people would stop venting their spleen on cops and fire fighters. "
Being as I had a brother-in-law who was a fireman, I know how the system works, at least in California. Retirement is based on a percentage of your total earnings for your last X years on the job -- it varies. Many law enforcement officers (maybe all of them) go for all the overtime they can get their last few years on the job and, after calculations, retire ABOVE their base pay for the rest of their lives.
It's not in proportion to anything else that's happening in society right now. And when you call them on it, they get just a little too self-righteous, many of them, about all they do for the public.
Not my brother-in-law. He was happily cynical about it; admitted it was crap, took advantage of it anyway. Died a few years after he retired, but my sister is still drawing near-six-figures off his pension and will for many years to come. She's not working these days.
for a second there, i was trying to figure out what was wrong with Bond Girl's comment.
Max has a post that ties in nicely with this. Even if the recession didn't happen, CA still would have wound up billions in the hole based solely on planned spending.
Sacramento Real Estate Statistics: California State Revenue Data: May 2009
sneering nihilist (profile) wrote on Wed, 6/10/2009 - 7:36 pm
i really wish people would stop venting their spleen on cops and fire fighters. there are virtual armies of drugged up filth that would love to kill a cop. you can even find "artists" that write "songs" where they fantasize about doing just that.
Capos in an open air prison camp that used to be a great country.
I would have loved to have been in the room during these talks: "let me see, Mr. Obama. You are here asking for money to save your economy while telling us how to ruin our own over some unproven theories about bituminous carbon. Why don't you go f... yourself."
FT.com / China - Biggest emitters fail to show the way forward
"Climate talks between US, China break down
By Kathrin Hille in Beijing
Published: June 10 2009 17:05 | Last updated: June 10 2009 17:05
China and the US failed to achieve a breakthrough at their latest round of climate talks on Wednesday raising the stakes in the global effort to fight world climate change."
sneering nihilist -
I really wish people would stop venting their spleen on cops and fire fighters
I have a lot of respect for the fire department, the coast guard, etc, when hell breaks loose they are running to the mess instead of away from it, even the police department and corrections officers do a job that I would really not want to do.
At the same time, how many military people do you see retiring set for life without a massive savings plan through their entire life?
Almost all of them have to do a second career after that, maybe Government service (it's a hard habit to break), or in the private sector. The issue that will break the U.S. bank is all of these unfunded pensions and benefits such as health care.
The more you regulate, the more sleazy accountants and lawyers join the feeding frenzy. Present company excluded of course.
Lucifer (profile) wrote on Wed, 6/10/2009 - 6:42 pm
Nope.. actually having a lot of fun.. it helps to be somewhat more in control of one's destiny than a wageslave.
//How do you find time to post between your job at the local 7/11 and driving the cab? Another bad day at the office with some bad White dude?//
Pride cometh before a fall, oh Lucifer. How much better to be a mortgaged homeowner building equity in an investment vehicle than a rent slave at the landlord's mercy?
scone
Marshall Law by Jan 2010 in some areas
It's "martial" law, or if you prefer "marital" - B2
I thought he was being cleverly ironic-- comparing a California bailout to the Marshall Plan.
~~~~~
Yeah! ..... that's what I meant ... !
thanks scone ...
I owe you one
And, how much debt would you issue if you had Uncle Sugar backing it for you?
Would it be more or less than if he didn't? This is one of those rhetorical thingies, btw...
Nihilist, who do you think pays for said cops to clean up the streets? And then pays them for 35 more years after their last day on the job?
Kahuna:
Agree 100%. I see it every day.
The military is facing many of the same issues vis-a-vis personnel costs as states such as CA. Since 2000, health care costs for the military (carried under the Tri-Care program) have increased over 260%. Part of this is due to the changing nature of the force. A volunteer, professional means more lifers, which in turn means more families and associated health/quality of life spending. The other problem is that no politician wants to be "against the troops", so ineffective and wasteful spending gets rammed through Congress "for the Troops". This, not the Taliban, will eventually break the back of the military. Personnel costs are the fastest growing expenditure in the DOD budget and will soon eclipse the cost of weapons/material. Believe me, there is a lot of high level concern over this issue at the highest levels.
I do not think the bond market will react well to California receiving or not receiving a bailout. On the one hand you have the fear that the federal government will not step in to help out a state. On the other hand you have moral hazard. Although on the moral hazard issue, one wonders what the difference is between this and the stimulus money the state was given or the assistance it received in previous recessions.
"If I wanted to destroy a nation," he wrote in 1966, "I would give it too much and I would have it on its knees, miserable, greedy and sick."
- John Steinbeck
Prescient....YES !
Grapes of Wrath, a classic for today?
BBC NEWS | Americas | Grapes of Wrath, a classic for today?
TJ and The Bear
It's nothing against cops, fireman, etc. as an occupation, only against the unsustainable benefits afforded them.
other state employees get ridiculous benefits as well. maybe they are not quite as lucrative, but still extremely generous. i work for a large, very successful, private company and i think that our administrative structure is grossly overweight. i can only imagine the size of the government's admin waistline.
my bottom line, which i didn't make clear at all, was that we should chop the utterly useless people from the payroll first before we start tinkering with emergency services at all. start with admin. start with the internet surfers, water cooler chaters, etc. after culling them you can start firing the people that save lives and maintain order.
"geithner has already stated that he doesn't have authority under the TARP to bailout California"
Not that I support any bailouts whatsoever, but since when is lack of authority a problem for the Treasury?
hello Gav...long time no chat w/. You okay with the bear rally?
Maybe Cali can get the contract to build the martial law signs, or they could be outsourced for security reasons to Who.
Bond Girl
The problem is this is not a one off ... this is a structural deficit ....
And with tax receipts diving and voters and Republicans negating all new taxes
there is no end in sight ...
Other states are not in as bad a shape but they will get there as the economy
continues to dive ...
That is why I decided to change my ways many years ago.. I saw this thing coming. I was not sure about the intensity, rate of change in intensity or timing, but it was obvious.
//Pride cometh before a fall, oh Lucifer.//
Anybody know how the 10Y ended the day?
Interesting argument.. can it also apply to the 15 trillion+ bank/ financial bailout?
//"geithner has already stated that he doesn't have authority under the TARP to bailout California"//
sneering nihilist,
I'm sure everyone would agree with that. Unfortunately useless bureaucrats are harder to identify as a distinct group.
I guess all that money I spent in San Francisco last month did not help the state coffers enough...
3.95, off the low of 3.99. Up 3.85 from yesterday.
Bond Market News, Info on US Treasury Bond and Markets - CNBC.com
Nihilist, who do you think pays for said cops to clean up the streets? And then pays them for 35 more years after their last day on the job?
the same people who pay the 22-year-old fighter who burned to death trying to help somebody. the same people who pay the 36-year-old cop that gets his brains sprayed on a sidewalk because he's wearing a uniform. i help pay their salary and don't mind at all.
bureaucrats are useful? bureaucrats without accountability are worse than useless.
//Unfortunately useless bureaucrats are harder to identify as a distinct group.//
"The problem with bailing out Cali is that it will set a precedent. Don't think that 49 other governors aren't watching how this soap opera plays out with a keen eye."
It's really not that complicated, CA and any other state gets bailed out by the Fed/Treasury, who in turn bails themselves out through inflating away the debt.
C'mon people, I know a lot of you are hoping for some massive failure to bail out your short positions, and I respect that, but how many times do you have to see the same pattern over and over again before you get it?
Nothing will be allowed to fail in the USSA today. There was an article today in the WSJ (or Bloomberg, forget which) about the auto suppliers asking for more money, on top of what they already got. Next up? The states? The airlines? Retailers? Who knows?
There is no way CA or any other state will be allowed to fail. It is just not going to happen.
It will all be loaded onto the shoulders of the Treasury, who will issue debt that the Fed will monetize. There is no other choice left.
Invest accordingly.
km4 -
"If I wanted to destroy a nation," he wrote in 1966, "I would give it too much and I would have it on its knees, miserable, greedy and sick."
- John Steinbeck
Strange, I always heard it as "if you want to destroy a country, give them aid".
Maybe it was dumbed down just for me, but I did remember it.
my second bottom line --
there are better people to bitch about than emergency services workers
I appreciate that California has major structural problems, but to be fair, a collapse in revenues of the magnitude that California has experienced would paralyze even the most politically homogenous and fiscally prudent state.
sneering nihilist-
I can only imagine the size of the government's admin waistline
Hey, my waistline resembles that remark!
Cops ~ Firemen ?
Depends on where they work how much they get paid ...
Some are underpaid ... others overpaid ...
In Vallejo , they were way overpaid ...
~~~~
Each department is different ...
C&C: Michael's user name was banned this morning, at CR's request. The vitriol was getting a little too strong.
sneering nihilist (profile) wrote on Wed, 6/10/2009 - 7:52 pm
other state employees get ridiculous benefits as well. maybe they are not quite as lucrative, but still extremely generous.
What kind of argument is that? Everyone else is doing it? Well your country is bankrupt from top to bottom, so maybe it's time to think about budgeting from a perspective other than, giving money to people you like.
my bottom line, which i didn't make clear at all, was that we should chop the utterly useless people from the payroll first before we start tinkering with emergency services at all.
Because you have a bromantic crush on them, and lustily and vicariously thrill to their exploits and beating up social undesirables, they must be a real American hero. After all, they filled up all those prisons you can't afford with the libbo-negro-beaner-hippies.
start with admin. start with the internet surfers, water cooler chaters, etc. after culling them you can start firing the people that save lives and maintain order.?
Who protect and serve the bankers and lawyers that looted your country bare. Your nation is bankrupt, paco. B-A-N-K-R-U-P-T. It has NO MONEY. why don't you ask yourself how it got that way before you rubber stamp another big fat check you cannot possibly afford?
Take your flag lapel pin and stuff it up your ass, you're what's wrong with this country.
Oh, go read some CR inspired doom porn... Now complete with a soundtrack.
sample
“Okay. Fine.” I had seen enough movies to picture what was about to happen. I was gone. Moving low and as fast as I could; I made it to the bushes in about 2 nanoseconds. I looked back. Max was up on all fours puking. Then with one arm grabbing her leg to steady him, he staggered to his feet. She had him stumbling towards where I was but it wasn’t fast enough. I thought of the “Lord of the Rings” The black dinosaur looking things with the killer screams that the Kings rode on was what it reminded me of as it swooped over us. “Well this is fucked” I remember thinking. It kept going, but not far enough, it turned about 700 yards out, and then hovered in place. It was as if it was alive, watching, tensing its muscles for the leap. That was a mistake. We didn’t have Stingers but Gardener had the Barrett.
afterthecrash.net
thx nuke
I don't think anyone seriously is out to screw cops. But some of the pay and benefits are outrageous, and easy to manipulate. I am in the military, I see a similar pattern every day. Sure, a lot of servicemen put their lives at risk under difficult conditions. In calender year 2008, I spent 34 days in home port. The rest was underway/shipyard. Doesn't mean I have a right to game the system and bankrupt the government. At the end of the day, we are all citizens, regardless of our employment.
Giving 1 trillion to unnamed banks.. what can I say?
Fed Unveils Lending Details After Lawmaker Pressure (Update2)
Fed Unveils Lending Details After Lawmaker Pressure (Update2) - Bloomberg.com
By Scott Lanman
June 10 (Bloomberg) -- The Federal Reserve unveiled its most detailed picture yet of its record $1 trillion expansion of credit, as Chairman Ben S. Bernanke responds to congressional pressure for greater transparency from the central bank.
For the first time, the Fed announced details on the number of borrowers and the ratings of securities pledged as collateral for loans. The data come in a new monthly report released by the central bank today in Washington.
The Fed said a total of 378 banks borrowed from its discount window in May or got funds from auctions of cash aimed at combating the liquidity crisis. Officials still stopped short of identifying the firms, a measure called for by some lawmakers and the subject of freedom-of-information requests and lawsuits.
Some historical background, for fun
Quality Munis Don't Default? Not So Fast - Bond Buyer Article
Invest accordingly.
Yes, but the devil is in the details. Notice how nobody in DC is talking about CA, let alone clamoring to send money? Again, it's a no win situation, so they've got to figure out a way to do it without getting crucified by the bond vigilantes.
"a collapse in revenues of the magnitude that California has experienced would paralyze even the most politically homogenous and fiscally prudent state."
~~~
More states will be lining up ...
The bubble effected the entire economy, every state ...
Bond Girl (homepage, profile) wrote on Wed, 6/10/2009 - 5:02 pm
I appreciate that California has major structural problems, but to be fair, a collapse in revenues of the magnitude that California has experienced would paralyze even the most politically homogenous and fiscally prudent state.
You have that exactly opposite. The collapse in revenues is/was precisely because California is neither conservative nor prudent.
thanks scone ...
I owe you one - m
Not at all. My pleasure. Nytol.
Does it matter? Almost every state is broke..
//"The problem with bailing out Cali is that it will set a precedent. Don't think that 49 other governors aren't watching how this soap opera plays out with a keen eye."//
I am the patron saint of lawyers, you know..
//Yes, but the devil is in the details.//
It should have been required viewing for financial engineers.
As a real engineer, BSEE, I resent the very existence of the phrase "financial engineers". Those weren't engineers in any sense of the word - they were criminals who used math for obfuscation. They all belong in jail, with very "friendly" cellmates.
The FED threatened to fire Ken Lewis if he did not follow through on the MER purchase:
Yahoo! 404 - Page Not Found
This could really blow up.
"According to an internal memo prepared by the committee's Republican staff, Paulson and Bernanke "put a gun to the head" of Lewis and Bank of America's board of directors to force the merger even though Lewis "felt it was his duty to his shareholders to try his luck in the legal system and back out of the deal."
Ruh roh.
Charlatan is a better description for those douchebags.. "financial engineers".. my foot
//As a real engineer, BSEE, I resent the very existence of the phrase "financial engineers". Those weren't engineers in any sense of the word - they were criminals who used math for obfuscation. They all belong in jail, with very "friendly" cellmates.//
"The FED threatened to fire Ken Lewis if he did not follow through on the MER purchase:"
That is why you need to get your members of Congress to support HR1207. It's a small step, but the least you can do for your country.
I am tired of ivy league BS.. but republican BS is even worser.
//"According to an internal memo prepared by the committee's Republican staff, Paulson and Bernanke "put a gun to the head" of Lewis and Bank of America's board of directors to force the merger even though Lewis "felt it was his duty to his shareholders to try his luck in the legal system and back out of the deal."//
@ghostfaceinvestah,
You really think the Treasury or Fed is going to save CA? The only remotely similar situation I can think of is NYC in 1975. But an out of control state? Maybe if they make the terms very painful. Nothing but pain for CA for the next few years no matter what happens.
bobn (homepage, profile) wrote (in reply to...) on Wed, 6/10/2009 - 7:09 pm
It should have been required viewing for financial engineers.
As a real engineer, BSEE, I resent the very existence of the phrase "financial engineers". Those weren't engineers in any sense of the word - they were criminals who used math for obfuscation. They all belong in jail, with very "friendly" cellmates.
As a real engineer (sadly, I'm not) you can understand how the math can be perfect, and the product still utterly wrong if management handed you incomplete or outright fraudulent specifications. Some really brilliant folks were involved in this crime, those trained to follow instructions and not ask questions, or those too cynical to care about the impact of what they were doing. Well, here we have their Tacoma Narrows, do we not?
Lucifer (profile) wrote on Wed, 6/10/2009 - 8:08 pm
Does it matter? Almost every state is broke..
I think we're going to have around 40-45 states in various forms of insolvency / distress. Probably some of the flyovers that basically never had anything will continue to have the same nothing. Everywhere else is going to get a look at how little is really left of America when you drain the hot air out.
The banality of evil
// Some really brilliant folks were involved in this crime, those trained to follow instructions and not ask questions, or those too cynical to care about the impact of what they were doing. //
Bond Girl
Great post ...
The magnitude of this country's problems has not dawned on most people yet ...
It is not in their life experience and they have been trained to discount problems ...
If you have been out on the street after losing your apartment you have an idea
of the shape we are in financially ...
Frederick Hyeck (sp?) coined the term "scientism" to refer to the budding financian engineers of his day.
Scientism: Using scientific terminology and models to incorrectly and inacurately describe social systems and phenomena.
mmckinl (profile) wrote on Wed, 6/10/2009 - 5:07 pm
"a collapse in revenues of the magnitude that California has experienced would paralyze even the most politically homogenous and fiscally prudent state."
More states will be lining up ...
The bubble effected the entire economy, every state ...
State Budget Troubles Worsen
Recession Continues to Batter State Budgets; State Responses Could Slow Recovery — Center on Budget and Policy Priorities
see TABLE 2: STATES WITH PROJECTED FY2010 BUDGET GAPS
Bet total now closer to $250 Billion
Just add it to the tab here U.S. National Debt Clock : Real Time
Obama and his Wall St bought and paid for economic team putting all their chips on the Banking Oligarchs to pump up great chunks of the Big Shitpile that's essentially worthless unless the peak real estate values of the bubble can be miraculously restored is going to be their undoing and rightly so !
Not restricted to social sciences.. quite common in many other areas.
//Scientism: Using scientific terminology and models to incorrectly and inacurately describe social systems and phenomena.//
"You really think the Treasury or Fed is going to save CA?"
Absolutely. What choice do they have? Let unionized workers lose their fat pensions? Have CA cut back social programs or education?
There is no choice now but to put it all on the back of the Treasury and have the Fed inflate away the debt.
The degree of dysfunction in Cali Government is simply not believable unless you have really looked at it,and even then...I can honestly say the majority of crack whores are more functional than the government here,city,county and state.
@Nuke,
It's Hayek. I put him near the top of all economic thinkers.
ghostfaceinvestah (profile) wrote on Wed, 6/10/2009 - 8:16 pm
There is no choice now but to put it all on the back of the Treasury and have the Fed inflate away the debt.
You should all listen to ghostfaceinvestah. Brother knows his shit.
Nemo, If you are out there. Very good bond post. I only had to read parts of it twice to understand it. Much better than my usual "My god this hurts!" followed by closing the window.
Relax.. it is just a software problem!
Retirement-planning software needs an overhaul
Retirement software needs an overhaul - MarketWatch
By Robert Powell, MarketWatch
BOSTON (MarketWatch) -- In the past year, improbable financial events became all too real, calling into question some commonly-held beliefs about retirement planning -- and forcing a closer look at software tools that use probability models as a basis for helping people prepare for retirement.
These days, savers, retirees and advisers are looking in the rearview mirror, questioning the value of software that failed to live up to its billing. Likewise, firms -- perhaps validating the notion that such software failed -- are rolling out new versions of their retirement-planning tools in hopes of meeting the needs of savers in a world where nothing is guaranteed.
that's not what i said or meant. cuts need to be made. lets start with the useless shit(white and blue collar) then work our way up to useful people(again white and blue), and shitcan them last. why not leave emergency services last? we have to disassemble this thing with some kind of plan right?
i don't "lustily and vicariously thrill to their exploits" either but you are a beautiful writer.
"libbo-negro-beaner-hippies" those are my favorite kind of hippies! let them out! let them out!
"Take your flag lapel pin and stuff it up your ass, you're what's wrong with this country." -- that hurt, man. and i don't do the lapel pin thing.
Absolutely. What choice do they have? Let unionized workers lose their fat pensions? Have CA cut back social programs or education?
I think they do have a choice here to force responsibility on CA. The moral hazard of shoveling money at CA is the same or worse as with the banks. We shall see.
ghostfaceinvestah -
"The FED threatened to fire Ken Lewis if he did not follow through on the MER purchase:"
I'll pay attention when it comes from a DA, FBI, SEC, or some other enforcement branch of the hydra. I'm conservative, but consider the source.
back later...
km4
thanks for the link ... yeah it's much worse now ...
Not only is unemployment going up at 600,000 a month ...
People have decided to start saving ...
Get ready for a big crash once reality hits home ...
Nuke (profile) wrote on Wed, 6/10/2009 - 7:15 pm
Frederick Hyeck (sp?) coined the term "scientism" to refer to the budding financian engineers of his day.
Scientism: Using scientific terminology and models to incorrectly and inacurately describe social systems and phenomena.
The new behaviorism is taking over as a paradigm of choice in most of the "softer" side of hard science. Definitely dominant in MIS at the highest levels of research publications.
Lucifer -
Relax.. it is just a software problem!
Yea, I feel so much better now! Don't worry, be happy. ohhhoohhoohhoooo
"I'll pay attention when it comes from a DA, FBI, SEC, or some other enforcement branch of the hydra. I'm conservative, but consider the source."
Normally I would agree, but they did release actual emails, this is not just innuendo.
E-mails show the Fed pressured BofA to complete Merrill deal - Jun. 10, 2009
"Lacker added that Bernanke "also intends to make clear that if they play that card and they need assistance, management is gone," Lacker wrote. BofA is based in Charlotte, N.C., which is in Lacker's district."
Seems pretty clear to me, regardless of who released it.
Seize all private wealth in California.. it's the only way !!!
Alternatively.. they could just stop the overspend.
"The moral hazard of shoveling money at CA is the same or worse as with the banks. "
~~~~
NO EFFING WAY !
software engineering technically is not even engineering my the strictest dfinition of the word. I think generally it has to apply to something that produces a physical product.
That said, any generally accepted engeinering field involves using math and science to basically design a system that is at equilibirium. such as the forces on a bridge. the resources of a given system etc.
Financial engineers are just really really bad at modeling and understanding their system. I would liken them to a programmer who likes to create infinite loops a lot. Throw in the money and greed and commissions and i'm sure some of them saw the consequences but just looked the other way figuring it didnt matter anyway. Most engineering schools actually require you to take an ethics course. I had to take one and i'm a software developer. I mean what if i write software that I know will cause the brakes of an airplane to fail every 100 days.
The fact of the matter is wall street probably knew it would lead to this (just like jamie dimon saying the party would end when the dancing stopped, he knew the party would lead to disaster) but they didn't care anyway. So at the root of it, wall street just has no ethics. Because someone knew it would happen, and they brushed it aside, becuase of their greed.
Cali is Smart? Tell me again why are they broke?
B_R writes: Take your flag lapel pin and stuff it up your ass, you're what's wrong with this country.
Don't be so subtle, man, tell us what you're really thinking...
Not that I support any bailouts whatsoever, but since when is lack of authority a problem for the Treasury?
Lack of authority is only an issue when you don't want to do a particular action. In legal terms, it's called "punting."
dupe post...
For some reason, I seem to remember at the beginning of the year California officials saying that they would not need to do another short-term borrowing like they did last fall because the state received so much from the stimulus....
hans,
The BS we are seeing around us is the cumulation of a lot of bad decisions and hubris. It cannot end in anything other than some kind of tragedy.
Bond Girl
People lie...
//For some reason, I seem to remember at the beginning of the year California officials saying that they would not need to do another short-term borrowing like they did last fall because the state received so much from the stimulus//
John Chiang is a voice of reason in a dysfunctional system. The governor has remained "optimistic" for far too long. Now congress, under severe pressure, is going to have to pass a new budget with the required 2/3 rd majority .... I can only imagine the political pressure that will be applied as everyone uses state bankruptcy as leverage to keep their constituent's pet projects.
The only hope is some leadership on the budget side. Every department should be required to produce a reduced budget, that rolls into a balanced budget. Congress can evaluate the suggested cuts, make some changes if necessary, but a certain % cut across the board would be a good starting point.
ghostfaceinvestah -
Oh, don't get me wrong, I don't doubt it for a minute.
My point was it does not matter until it does. This has been in the breeze for a while, but until the Justice Department indites BB, its much ado about nothing. We live in interesting times, and I still say the "men in black" have been co-opted by the PPT!
"The BS we are seeing around us is the cumulation of a lot of bad decisions and hubris. It cannot end in anything other than some kind of tragedy."
It's from an entrenched 'executive class' who can't manage a business to save their lives. But make sure they're well compensated for being worthless.
More green shoots BS..
Japan Economy Shrank 14.2% Last Quarter on Exports (Update1)
Japan Economy Shrank 14.2% Last Quarter on Exports (Update2) - Bloomberg.com
By Jason Clenfield
June 11 (Bloomberg) -- Japan’s economy shrank at a record 14.2 percent annual pace last quarter as exports and business investment plummeted.
The contraction in gross domestic product was smaller than the 15.2 percent estimated last month, revised figures from the Cabinet Office showed today in Tokyo. The fourth quarter contraction was revised to 13.5 percent from 14.4 percent.
California should just apply directly for a TARP "take the money or else" cramdown. Fire up the choppers loaded with clownbucks for clownifornians.
The french nobility also believed that they had a hereditary rights to not pay taxes, even when france was bankrupt.
//It's from an entrenched 'executive class' who can't manage a business to save their lives. But make sure they're well compensated for being worthless.//
hans (profile) wrote on Wed, 6/10/2009 - 7:24 pm
The fact of the matter is wall street probably knew it would lead to this (just like jamie dimon saying the party would end when the dancing stopped, he knew the party would lead to disaster) but they didn't care anyway. So at the root of it, wall street just has no ethics. Because someone knew it would happen, and they brushed it aside, becuase of their greed.
Interesting irony of life, isn't it? The people with the power made enough "funny" money to literally change the world, and had it been plowed back into the society none of us would have been the wiser and they could have lived extremely well, and even been looked upon as benefactors of society. Instead they appropriated themselves a king's ransom and decided to start their own universes as they played keep-up-with-the-billionaire-joneses.
another reminder that Big Brother is watching
And peeing his pants.
There's 2 million Federal employees, at least 1/2 of whom have no power, brains or training.
There are 20 million households underwater.
At least 13 million unemployed.
The System only holds together because of payoffs to large # of the middle class.
When that stops, Feds only have two options - large-scale weapons that they can't use in the U.S. or small-scale, one-on-one deployments. They're not designed for anything else.
I hadn't seen that news about the guy in D.C. until an hour ago.
Pretty interesting, he essentially attacked the Federal Reserve back in 1983.
Hans:
I had to take ethics seminars in engineering school. Leads to some interesting discussions wrt working for defense contractors. When I took some higher lever econ courses in college, I was shocked by the modeling they used to describe real world markets. Mostly it was simple differential equations. These models have difficulty describing simple oscillators (they break down when you move outside a relatively small range of motion or introduce more complicated forcing functions, springs start to exhibit non-linear characteristics when you stretch them too much). Having seen that, I was less surprised by the financial meltdown when it happened.
Tell me it isn't true, Lucifer
Ha - funny, from the retirement software link:
Said Sharry: "There is no silver bullet."
I thought that was the retirement plan for around half of the baby boomers dealing with rising medical cost.
Which one of my statements?
There is something wrong when I am more truthful than those who claim to worship god.
//Tell me it isn't true, Lucifer//
Kauai_Kahuna (homepage, profile) wrote on Wed, 6/10/2009 - 7:34 pm
Ha - funny, from the retirement software link:
Said Sharry: "There is no silver bullet."
I thought that was the retirement plan for around half of the baby boomers dealing with rising medical cost.
"There is no silver bullet" ought to be the mantra of every educated human being on the planet.
Mililani_Oahu
Isnt everyone a 46 year old Master Chief with a house in K-Bay, a rental in Kalihi, and two kids at Punaho retiring next year?
That people lie. You know you are a dork when you actually have to explain your jokes...
Most Master Chiefs I know are retiring with very little thanks to an ex-wife in Norfolk, another in Bremerton WA, and a girlfriend in Pearl City.
However most people believe that people wearing fancy clothes are more truthful.. and that is the real joke.
//That people lie. You know you are a dork when you actually have to explain your jokes.//
bANK fAILURE -
Mililani_Oahu
Isnt everyone a 46 year old Master Chief with a house in K-Bay, a rental in Kalihi, and two kids at Punaho retiring next year?
I don't think so, no one likes my cooking except for my beer.
I think you must be thinking of Kahala?
"Leads to some interesting discussions wrt working for defense contractors."
A co-worked once said.. "The weapons systems I worked on only killed bad people."
Do these weapons come with a soul and conscience?
//A co-worked once said.. "The weapons systems I worked on only killed bad people."//
bureaucrats are useful? bureaucrats without accountability are worse than useless.
Bureaucrats are essential to ensure that things don't get done. I'd even venture to say that along with attorneys they effectively function as the conscience of a corporate or government body.
This was not snark. Many's the time in my former company that an honest and hard-working bureaucrat kept someone--usually a gung-ho officer or salesperson--from cutting a corner that would have been fatal. They're essential to a functioning control system, especially at financial institutions. You might prefer to trust the individual consciences of your employees but you will always make at least one mistake in hiring.
splat -
A co-worked once said.. "The weapons systems I worked on only killed bad people."
Cool, how did he program the three laws of robots into them and change them to only work on bad people?
Are most idiots that blatant? Most of the ones I know hide it better.
broward (homepage, profile) wrote on Wed, 6/10/2009 - 7:33 pm
There's 2 million Federal employees, at least 1/2 of whom have no power, brains or training.
There are 20 million households underwater.
At least 13 million unemployed.
The System only holds together because of payoffs to large # of the middle class.
Yes. It's all held together by payola among a coalition of willing participants in an extortion racket. There's little to no loyalty once the financial incentive is removed, in fact there is outright distaste in many cases. So, it's a network which will start looking like the duct tape and twine it really is, soon enough.
whats that Portagee downtown slum (district) called, you know its where Hotel Street ends?
Sample!!
Probably a re post.
Fed Unveils Lending Details After Lawmaker Pressure
Fed Unveils Lending Details After Lawmaker Pressure (Update2) - Bloomberg.com
mmckinl wrote:
"The moral hazard of shoveling money at CA is the same or worse as with the banks. "
~~
NO EFFING WAY !
My reasoning is that as bad as the banks are, they are easier to control than a state. If CA gets Fed money without painful strings attached, what incentive is there to fix the seriously broken CA budget process? What incentive is there for any state to reign in spending? I could, of course, be completely wrong.
It is ironic that this system was created through free choice. None made them act like greedy pigs, they CHOSE it.
//Yes. It's all held together by payola among a coalition of willing participants in an extortion racket. There's little to no loyalty once the financial incentive is removed, in fact there is outright distaste in many cases. So, it's a network which will start looking like the duct tape and twine it really is, soon enough.//
bANK fAILURE -
Kalihi? Ending of china town going Ewa? Yep.
Of course there is a lower and upper, just like RE, its location, location, location.
If CA gets Fed money without painful strings attached, what incentive is there to fix the seriously broken CA budget process?
Abosolutely none.
What incentive is there for any state to reign in spending?
Also none.
I could, of course, be completely wrong.
No, you are correct. CA is going bankrupt and they still can't reign in the spending. They're like an insane shop-a-holic with a slew of credit cards !! Gotta spend ! spend ! spend ! spend !
I think it kind of depends on how they go about providing the assistance. Providing some sort of liquidity facility (after all, that is what we are talking about here) is not as bad as an explicit guarantee on longer-term debt or a reinsurance program.
Comrade Coinz (homepage, profile) wrote on Wed, 6/10/2009 - 7:45 pm
My reasoning is that as bad as the banks are, they are easier to control than a state. If CA gets Fed money without painful strings attached, what incentive is there to fix the seriously broken CA budget process? What incentive is there for any state to reign in spending? I could, of course, be completely wrong.
There is no incentive to fix things. By design. Just to keep it going at any cost. If it collapses the magnitude of the deception would become known, and even the most propagandized, brainwashed, improperly-educated, fluoride-treated, satellite-mind-controlled mass-media-programmed, behaviorally-conditioned masses will be rioting in the streets and sharpening the guillotine blades.
Please correct me if I'm wrong, but the loan to Cali was to float the unemployed benefits.
May I point out that many people from many states go to Cali to file unemployment because the benefits are high. So in a way, I can see where this is a National issue, and not just the state.
Of course a lot of people have been complaining about the outflow of California people moving to their areas and bringing down the property values also, so.....
I think that's how some folks would justify it to themselves, in something of a tongue in cheek way.
However anyone who pays taxes and lives in the states is supporting the military machine. The way to resolve that would be to not pay a percentage of taxes which would be allocated to the military. Then not pay a percentage of the fines levied or serve the jail time like a true stalwart of the cause. Otherwise by their unwillingness to make the personal sacrifices they're just enabling the IMC.
Tim waiting for 2012 (homepage, profile) wrote on Wed, 6/10/2009 - 5:45 pm
Fed Unveils Lending Details After Lawmaker Pressure
Fed Unveils Lending Details After Lawmaker Pressure (Update2) - Bloomberg.com
Senator Bernie Sanders, the Vermont independent who sponsored an April 2 resolution that urged the Fed to identify borrowers and passed by a 20-vote margin, said today’s Fed report is “completely insufficient.” “It is time for the Fed to name names,” Sanders said in a statement. The money “belongs to the American people,” and disclosure would show whether banks that are repaying the government’s capital injections are getting loans from the Fed, the senator said.
We're waiting.....
Kudos to Bernie Sanders....we need about 50 more of him in the Senate
LOL !
Lucifer (profile) wrote on Wed, 6/10/2009 - 7:47 pm
It is ironic that this system was created through free choice. None made them act like greedy pigs, they CHOSE it.
There was a funky radical back a few millenia ago who had some interesting things to say about the children of the devil, and the powers of the prince of this world, if I remember my religious propaganda correctly. Something about choice was in there too, I believe.
"Interesting irony of life, isn't it? The people with the power made enough "funny" money to literally change the world, and had it been plowed back into the society none of us would have been the wiser and they could have lived extremely well, and even been looked upon as benefactors of society. Instead they appropriated themselves a king's ransom and decided to start their own universes as they played keep-up-with-the-billionaire-joneses."
Not accurate at all. While it is true that the banksters earned obscene incomes and bonuses, it was NOT these bonuses themselves that actually affected the economy. Even if they had made normal wages, it would not prevented the problem we are seeing.
The cause of this depression was the credit bubble that preceded it. The federal reserve and the federal government made poor policy decisions which allowed individuals, corporations, and government to increase their levels of debt to unsustainable levels. This increase in debt caused every producer of goods and services in the world economy to mistakenly believe that there was a strongly increasing demand for their goods and services. As a result, every shopkeeper, Chinese toy manufacturer, nail salon owner, auto manufacturer, home builder, real estate office, etc, built up far more capacity than would have been required if the level of debt had remained constant in the economy. The effects of loose credit were astonishingly pervasive and affected every corner and crevice in the economy to an absolutely amazing degree. I would have never believed it if I had not been watching it unfold every day here on CR!
"Kudos to Bernie Sanders....we need about 50 more of him in the Senate ... LOL ! "
~~~~
Yep !
ResistanceIsFeudal,
I do not make choices.. people do.
//Something about choice was in there too, I believe//
"Senator Bernie Sanders, the Vermont independent who sponsored an April 2 resolution that urged the Fed to identify borrowers and passed by a 20-vote margin, said today’s Fed report is “completely insufficient.” “It is time for the Fed to name names,” Sanders said in a statement."
The only irony is he was asking the CFTC or someone to find who was driving up oil prices.
He is going to soon realize that it is none other than BB, through his debasement of the dollar.
"The effects of loose credit were astonishingly pervasive and affected every corner and crevice in the economy to an absolutely amazing degree."
~~~~
Yep ...
That's why this sucker is going down ...
Instead of de-leveraging they are trying to prop the s-pile up ...
Giving trillions to banksters who will only hoard the money ...
A note about the CA state government plan to take a couple of billion in property tax revenue from the counties and cities. According to the interpretation of high level city officials I know, the state can only borrow the money. Also, they must pay if back within 3 years and cannot take local property tax revenues again until the original loan is paid back. So, it is a one time hit that must be paid back relatively quickly.
Poll!
Who should be the face on California's new currency?
_ Arnold
_ Reagan
_ Clint Eastwood
_ Angelina Joie
One vote for Angelia entered herein!
And if you REALLY want demand for the currency, I suggest it be a bust.
Comrade Coinz
So the counties and cities have a higher level cabin on the Titanic ...
GFI, USdollar is as far out of BB hands as the bond market is....
BB will not throw in the towel, he'll throw hellasious at this till the mint is overcome with hefty and cumbersome 401k withdrawls to purchase the silver and gold coinage... you actually pay no penalty for this move, you pays the taxes but there are no pennies for penalties.
We saw this last year as the mint shut down production....a mint failure is worse than a bond failure.
If thou cannot mint, thou must not print
Mozilo, Angelo - The dollar is toast!
Sorry, had to say it.
How did putting an austrian expat's face on currency work out the first time.
//Who should be the face on California's new currency?//
Who should be the face on California's new currency?
Chico Marx on the $1000
Harpo Marx on the $50000
Groucho Marx on the $10000000
@mmckinl,
Yes, you could look at it that way. More mature cities actually have pretty flat revenue since prop 13 kept taxes well below market value. What is hurting those cities is lower sales tax revenue.
Just took another look at this again and glad we had this reporter who nailed it
The Bilderberg Plan for 2009: Remaking the Global Political Economy
The Bilderberg Plan for 2009: Remaking the Global Political Economy
One Bilderberger said that, “the banks themselves don't know the answer to when the bottom will be hit.” Everyone appeared to agree, “that the level of capital needed for the American banks may be considerably higher than the US government suggested through their recent stress tests.”
Further, “someone from the IMF pointed out that its own study on historical recessions suggests that the US is only a third of the way through this current one; therefore economies expecting to recover with resurgence in demand from the US will have a long wait.” One attendee stated that, “Equity losses in 2008 were worse than those of 1929,” and that, “The next phase of the economic decline will also be worse than the '30s, mostly because the US economy carries about $20 trillion of excess debt.
Until that debt is eliminated, the idea of a healthy boom is a mirage.
But the MSM, the pundits, the economist assclowns, and Obamanomics all say recovery is just ahead with many green shoots springing up
Comrade Coinz
Yep ...
Oakland lost 5 car dealerships already!
~~~~
They quickly poo-pooed the idea of bankruptcy ...
but that idea will be coming back soon ...
o.jeff (profile) wrote on Wed, 6/10/2009 - 7:56 pm
Not accurate at all. While it is true that the banksters earned obscene incomes and bonuses, it was NOT these bonuses themselves that actually affected the economy. Even if they had made normal wages, it would not prevented the problem we are seeing.
I wasn't claiming so much that the stellar bonuses/salaries themselves were the contributing factor, but rather that this money earned was spent stupidly or plowed back into the speculative financial system instead of invested with the intent to create or facilitate real economic growth. Credit then would be a more accurate representation of an attainable future state. That's where the false signal comes in. The "wealth effect" of asset inflation took over and credit was confused with wealth. The money was, and is, real, at least on paper. But eventually someone has to try and cash the checks. Create real productive growth, and the "real economy" catches up to the credit, which is supposed to be the idea behind credit and loans, not conspicuous consumption, which has no future value. Do that, and the scam could be prolonged for a very long time.
sneering nihilist (profile) wrote on Wed, 6/10/2009 - 8:20 pm
that's not what i said or meant. cuts need to be made. lets start with the useless shit(white and blue collar) then work our way up to useful people(again white and blue), and shitcan them last. why not leave emergency services last? we have to disassemble this thing with some kind of plan right?
Because the system has a vastly overdeveloped security component that has no purpose other than to meet an artificial need. We have a "war on terror" and a "war on drugs" that have created a security-prison complex that is backed by propaganda about how necessary it is. We make criminals, and chase them, for no purpose other than to have criminals to chase. It's a deliberate play on your emotions to keep you in fear and heedless of critics of the state. So in short, those guys ARE the first layer of fat.
Also, the state is much too large and there needs to be an across-the-board cut, with no playing favorites. Rationalizing budgets has to come from a zero basis, not an emotional one. We have this much money and we have very many needs to meet. Feeding the hungry, fixing the streetlights enforcing weights and measures, they are all just as essential, so there can't be a "place" to start, because this can't be a little trim around the edges, the pie needs set down and cut up anew, with everyone getting a smaller slice and learning to deal with it.
i don't "lustily and vicariously thrill to their exploits" either but you are a beautiful writer.
Thanks. I've made a living with it.
that hurt, man. and i don't do the lapel pin thing.
Nothing personal but it should hurt. Your country is bankrupt and not just one part of it, but the federal, state and local components. How can I "hate" the boys in blue? Well, they're a bunch of double-dipping pension gamers who get promotions based on filling up prisons with non-violent offenders and keep the cam going by playing on people's fear and respect. It's contemptible no matter what their job is.
Also, they're predominantly right-wing tools of the shallowest sort, who cheerfully smashed the face of anyone who spoke out against the Iraq war or the abuses of the Bush administration in general, then made a spreadsheet entry about how they were a politically unreliable domestic terrorist. They enabled a domestic tyrant who inflicted profound and lasting damage on the American political mechanism. That's also contemptible because it's naked politics conducted under the fig leaf of public security. It's not just my prejudice, cops are reactionaries, in every time and place, from the Jajaweed in Sudan (primarily off-duty cops) to the guys who raped and killed Chinese in Indonesia under Suharto (cops and their cronies) to the enforcers of political order in al-Basra (Shi'ite good ole boy cops, I had a friend who used to chow with them -- they had a fervent willingness to take care of any Sunni problems in their area real good) to the Alabama State Troopers of the Sovereignty Commission period.
You need to get serious about just who these people are, what their role in your society is, and what the real costs of having them around is. Its awesome they look out for people in trouble -- not so awesome when you compare the documented difference between the police response to, say, a missing person report filed on a 23 year old white girl and a 23 year old black girl, but it's something -- but that's just one aspect of who they are and what they do. If all you see is "hey, this guy is out there looking out for me and you" you are seeing just one aspect of the situation, and importantly, you are seeing the aspect of the situation that is deliberately proffered to you to excite a calculated emotional response.
Thats a seriously last resort. My little birds tell me that the Big O is scared spitless of possible military violence is keeping the soldiers out of county for that reason.