Yesterday, I had to make the rounds for the critter's foods. I finally took notice of what's lived in and what's been abandoned. It's quite remarkable - even here. Unlike an urban area, when the housing here is spaced so far apart as it is, it has REALLY emptied out..
From what I hear more and more people who are underwater and in trouble consider that paying their mortgage is optional. It would be month and month before anyone tries to evict them.
It's possible. For Miami, another 10% off means houses sell at 45 cents on the
dollar.
Who owned those securities?? Where are they going back to? m
Where are they now? Why were the Italian police so uncommonly
dilligent? Were they bribed to "find" them.
Like the Kennedy assassination, we will never know.
Another 36 percent in my California town would place would still place home ownership beyond the means of the average income here at this point in time (Mark!). I'm expecting 50 percent, as unemployment rises and mortgages fail. This is Alt-A land here; our Doom Time begins next year.
this is OT/ but I was surprised that that Security Council vote would go through on the North Korean issue...
most of their supplies come across one bridge over the Yalu into China...
Well, one supposes gravity is reasserting itself. That's pretty grim...how will this affect the banks...how many will need additional capital? Or are these bonds AIG backed?
All Florida loans are recourse and in fact deficiency judgments are a
matter of right.
They are NEVER asked for. Never. Still never. I don't understand why.
Bad publicity? Uselessness? People will just file bk?
In Fla, it would involve the banks spending money, an extra legal step to
file something asking for the money, and then proof the value wasn't
there, and then you'd have to collect it.
Good luck with that.
The foreclosure mills are paid a pittance. They are not gonna do extra
work for free, and the banks are completely and totally overwhelmed.
And, frankly, I can't imagine a judge granting one at this point. They are
elected. Except in a very unusual circumstance.
I thought Fitch was actually fairly good and comparatively early with downgrades. I wonder what that 2010 stability is made of - do we grind down slowly until then? Is there further downside, beyond 2010, among the late-to-the-wake areas like NYC?
I'm reposting this.....Multiple choice for Americans, due July 1st given California budget deadline:
(a) Bailout about California in 2009 to the tune of $30B or so by the time it gets done. Bailout out California again in 2010, 2011, and 2012 while California voters simultaneously increase spending for things such as public sector pension spending through the ballot initiative process. Buy stock in kneepads for the next 3 years.
(b) Do not bailout California and watch the municipal bond market melt apart. Could be worse than Lehman Brothers and kick off the "second slope down" part of the W-shaped recession.
American taxpayer, the choice is yours. As Denis Leary once said please try to get your whole head in front of the shotgun before pulling the trigger.
I lifted this from streeteasy.com, which tracks sales in NYC. This is just for condos, not coops, townhouses etc. Hopefuly, it will stay formatted. Site is great for watching the inventory build-up, and the days an apt. is listed, then relisted by another brokerage. Seriously, compared to Cali, we have a long way to go.
Manhattan Condo Listings Snapshot
Size (ft²) $ per ft² Price
Studio 536 1,130 599,000
1 BR 791 1,105 870,000
2 BR 1,307 1,232 1,645,000
3 BR 2,000 1,470 3,030,000
4+ BR 3,089 1,699 5,500,000
Medians for listings from past 60 days from StreetEasy data. Excludes some extraordinary properties. No representation is made as to the accuracy of this data.
That made spit a little of my coffee, but thinking it through, I can reconcile it. What's scary is that this is a ratings agency, rather than an opinion writer, with greater consequences for overstatement.
As far as recourse goes... it does seem that the lenders don't ever do it. In CA, technically, the loan is no longer non-recourse if they borrower has refi'd or taken a 2nd/HELOC. This would open up judgements to an awful lot of borrowers.
The thing that frustrates me is not so much the borrowers who bought at the top and got stuck, it's the people who had a reasonable loan and then HELOC'd themselves way in over their heads. To think that we are supposed to now help borrowers that took, often-times, hundreds of thousands of dollars and just spent it on living expenses, cars, vacations, whatever.... ugh. I cannot muster one ounce of pity for them. Even the fact that they no longer get a 1099 on this forgiven money doesn't seem right. If someone gave me a quarter million dollars, I'd have to pay taxes on it.
Do you have a bias? The way you phrased the question makes it sound like you favor (a). I fail to see how (a) is a better choice than (b). (b) would mean we take our medicine now, (a) would be another attempt to kick the can down the road a little bit farther.
What can I say. When you start a corporation, you loan the corp money, rather than hand it
all over, so when you get it back it's a return of principal, rather than a taxable distribution,
or if an S corporation, taxable once when paid. When that runs out, then you have to pay income
taxes.
That is pretty close to the sum of my tax knowledge.
I chose B. The muni mkts will take a hit for a while and then people will begin to
realize that there are good muni mkts and bad ones, and bid accordingly.
Ftich seems to have been marginally better than S&P or Moody's, but that said the percentage bet would be that the ratings agencies continue to be behind the curve...
lawyerliz (profile) wrote on Sat, 6/13/2009 - 7:16 am
Did you buy a house, Rex?
Wiser minds prevailed (the ones here mainly) and we will rent for 12-18 months and then peek outside again. This market is moving very slowly and is still overpriced. Thank you to CR and the 'nodes. And to you for asking!
i choose option (C). Jam the pension benefits through the PBGC, giving the pensioners the legal max of $54K. At that point, CalPERS and CalSTRS would be massively overfunded and then could return funds back to the general fund.
Horsesh*t. We'll have no say on the choice at all. Just like all the other "choices" we've been subjected to over the past year. Therefore, I assume we'll get (a).
But if you don't pay it back, then it's money that you received tax free. They essentially received cash money, unlike a purchase money loan. That's why I don't have a problem with a 1099 for this kind of debt forgiveness, especially for those that really abused the system. Of course, often, collecting these taxes would be like getting "blood from a stone".
that idea never happen, mainly because Wall Street would lose access to a $500B slush fund.
what's really pissing me off right now are the public unions that are agreeing to forgo benefits and to increase contributions BUT NOT FOR CURRENT EMPLOYEES AND RETIREES, only future employees.
"sideways did boost the price of premium pinot grapes,and that helped a couple of my friends who have small vineyards.However we already have a surfeit of idiots.One requirement for getting involved in local government is that you must no longer need drugs to be delusional.They take them anyway...
I couldn't understand why I should empathize with an overweight balding guy who can't pick up girls and likes to drink wine. He was a loser, and that movie was depressing. Maybe I missed the "message".
AFAIK, there is no law to handle a state BK. The state courts would determine the state's liabilities in that case. Or, they pass out IOUs or clownbucks.
In California, on a statewide basis, year-to-date sales tax collections were down 11.8% while income taxes are down 20.7% from last year's totals through May. If the definition of depression is down 10%, then we're past that mark.
New housing starts are down 84%. The state has lost 26% of its construction jobs, compared to 16% nationally, and 7% of its retail jobs, compared to 4% nationally.
The draconian cuts to California's state budget being pushed by the Worst Governor Ever threaten to send another devastating wave of job cuts through the economy.
Nobody's done the math on the fiscal effects of the twenty billion in spending cuts proposed by the Governor, but let's take some guesses.
Including money lost in federal matching funds, and the multiplier effect, let's say the total lost economic activity is somewhere around 35 billion. That's 2.3% of the state's 1.5 trillion gross product gone, 3.5 billion in state and local taxes gone, 400,000 more unemployed, an unemployment rate jumping another 2% (and it's already at 11%), thousands of people forced into nursing homes because their home health care coverage disappeared, higher medical insurance rates for those with coverage, another billion dollar hit to our unfunded debt for unemployment insurance, thousands of additional failed small businesses, tens of thousands of additional homeless people, tens of thousands of additional homeowners pushed into default and foreclosure.
California's in a depression, and spiraling downwards.
Why should this be a problem for the rest of the country?
if the Calimorons had even taken a few baby steps to try to save themselves,
I would be sympathic. Why should Floridians, who are trying, and other states,
pay money to Cali? Sounds like extortion.
Don't forget that for decades California has been supporting the rest of the states through Federal taxes. Cali gets back a lot less money from the Federal government that it sends. The excess money is distributed to other states. Sounds like extortion at the federal level, no? Cali would not have any budget woes if it stopped sending federal taxes to D.C.
what's really pissing me off right now are the public unions that are agreeing to forgo benefits and to increase contributions BUT NOT FOR CURRENT EMPLOYEES AND RETIREES, only future employees.
Generational warfare.
if the Calimorons had even taken a few baby steps to try to save themselves,
I would be sympathic. Why should Floridians, who are trying, and other states,
pay money to Cali? Sounds like extortion.
The state's government has been totally taken over by a powerful party machine that draws its own electoral districts and as a result whose incumbents are essentially impossible to vote out. California is a microcosm of the disease affecting the national government. They citizens of california are not "morons," they're powerless. The leaders of the California state government aren't morons, they're crooks, and a great number of them intend to move out of state after they're done doing a stint in the capital "getting theirs."
"if the Calimorons had even taken a few baby steps to try to save themselves,
I would be sympathic. Why should Floridians, who are trying, and other states,
pay money to Cali? Sounds like extortion. "
It's extortion by the current political system, trying to save itself. The one thing Arnold has right is to wave Armageddon in everyone's faces; only thing is, he's overstated his case so many times before in so many different situations, no one believes him.
Yes, we're in trouble... but a lot of it is the wrong mix of taxes, the wrong system for distributing and controlling $$$. What other states don't understand is just how much local control, through funding, the state has over the operations of municipalities and school districts. Too many cooks, nothing works right.
I think it was Rob, sometime last week, who pointed out there is nothing terribly wrong with California's state programs or even staffing levels - that it was compensation and benefits which had departed reality. I'm no expert on the state's condition, but the observation rang true for me as I've noticed it elsewhere.
The proposed job cuts look like government lashing out in frustration. A pretty picture. And not the only possible approach, evidently.
The Governator wanted to sell state landmarks and prime real estate (San Quentin, LA Coliseum, etc) , but this week he discovered that california is in a real estate slump that would depress prices and also that it would take 2-5 years to get the money from the sale.
Then the Governator heard from county sheriffs and municipal police and fire departments about his plan to close the State's budget gap by raiding county and local taxes. That plan is now off the table.
Perhaps running on the campaign to roll back the "Car Tax" wasn't such a good idea, was it, Arnold? It has cost the state $16 Billion.
Oh, and for Rob Dawg bait, watch this neat little video from the Chairwoman of the California Assembly Budget Committee, which does a fine job of explaining the sources of the budget deficit and the inability of the state to address the problem under its current constitution.
Another 36% drop in real estate from Q1 seems reasonable to me.
And the crooks are being moronic, 'cause there isn't gonna be any "theirs" to get in 47 days.
I'm tempted to propose a tip jar wager on that one. Why would this be the first can to not get kicked down the road? I say in 47 days we'll have a "California Czar", and he or she will make everything better.
Don't forget that for decades California has been supporting the rest of the states through Federal taxes.
Inflate house prices by 300%, collect property taxes on the appreciation, take out HELOCs, IO ARMs, NINJAs, drive the newest, hottest car with the newest hottest arm candy in the newest hottest clothes. Man, you guys were so rich.
How much of that Federal revenue would you say was from "worthwhile" things versus the FIRE economy?
MLM - kinda agree. A full-blown state BK would test the system from the constitution through tort law, RoL, fiscal and monetary policy, and social and civic order.
lawyerliz wrote:
I am thinking about Fla's children.
And why didn't Cali make a stink about this long ago?
California doesn't control how the federal government spends money. Are you saying we should let each state fend for itself? I am all for that,
In 2004, Florida received $1.02 for each federal tax dollar it sent to D.C. California received $0.79. So California has been subsidizing Florida. You are right, that should stop.
Mississippi received $1.77, Alabama $1.71, WV $1.83. Let them fend for themselves.
"In 2004, Florida received $1.02 for each federal tax dollar it sent to D.C. California received $0.79. So California has been subsidizing Florida. You are right, that should stop.
Mississippi received $1.77, Alabama $1.71, WV $1.83. Let them fend for themselves."
Don't we call this country the United States, not the Confederacy?
Don't forget that for decades California has been supporting the rest of the states through Federal taxes.
I've always wondered about this calculation. Does it include the hundreds of billions in government backstops of bad Cali real estate? I'm guessing not, especially if paid to private corporations (e.g. BAC, WFC) even if the macro effects are the same as if spent by the feds. And I'm 99.9% positive it doesn't include Federal Reserve asset purchases.
Cali has a pretty big congressional delegation. Bet the locals who were feeding in the federal
trough didn't care that those who weren't were losing big.
I agree. Let everyone deal with their own problems at the state level. Obama might try to bailout the states in a federal power grab. I would guess that a California bailout would have all sorts of conditions a la TARP, and then they try to use that deal as a precedent for other states. I hope it doesn't go that way.
Yup about more 18 mo. of RRE still tanking, CRE getting crushed, continuing unemployment ( U6 around 20%), decreasing consumer spending ( 70% of GDP ) should be enough 'Roundup' to keep those 'green shoots' from sprouting and keep recession going strong !
I hardly meant to imply that Florida was an example of fiscal soundness
to hold up to the world, just that we were far less bad. And there are lots
of cuts that are really happening here. I'm sure we don't pay our prison
guards like Cali!!
California legislators are subject to tight term limits laws passed by referendum. No more than two terms in any one seat. The result is a short time horizon, little development of skill, and little power.
The districting fiasco in California is actually best enjoyed by the radical wings of both parties. The majority party, Democrats, are large enough to have a big middle that compromises. The republicans are, relatively speaking, much more extreme and homgeneous.
The constitution that sets up the 2/3 votes on budgets and taxes gives the minority party the power to freeze the government. Together with voter referenda that impose unfunded mandates (3 strikes led to a doubling in prison population and mega power for the prison guard's union) and mandate percentage distributions of the budget, this is a disaster . . . i.e., the roots of the disaster.
Even out taxation by balancing income and property taxes (repeal Prop 13), bring sanity to criminal justice (repeal 3 strikes, release drug offenders), restore the Car Tax ($4-5$ billion a year), and eliminate the 2/3 rules on budgeting and taxes . . . and the problem would be solved. Chnaging the districting laws and repealing term limits would help a lot, too.
Oh, and for Rob Dawg bait, watch this neat little video from the Chairwoman of the California Assembly Budget Committee, which does a fine job of explaining the sources of the budget deficit and the inability of the state to address the problem under its current constitution.
@ OC Progressive (homepage, profile) wrote on Sat, 6/13/2009 - 7:32 am
Look at the California Controllers latest report.
Underscoring the severity of California's cash crisis, Controller John Chiang, who has previously warned the state's government risks running out of cash without a budget deal, said revenues in May fell by $1.14 billon, or 17.7 percent, from a year earlier.
"In 2004, Florida received $1.02 for each federal tax dollar it sent to D.C. California received $0.79. So California has been subsidizing Florida. You are right, that should stop.
Mississippi received $1.77, Alabama $1.71, WV $1.83. Let them fend for themselves."
Comrade Coinz, I was reacting to the apparent notion of some of us here that the states are semi-independent countries which owe one another little responsibility. I thought that concept of the Union had been settled for some time. There is a centrifugal tendency that needs to be countered constantly, a sort of political torque. In fact, as long as there is free movement of all sorts within the US we are one country.
@LawyerLiz: I think what was mean that since the system won't crash,
The last time this question was posed, I opted for B also, largely because I think it might actually cause system crash, and in so doing, bring a lot of crap down on our heads - and maybe shut up the "it's Cali's problem" claim. I am not sympathetic to California's broken mess, but I fear that letting them tank will have bad repercussions for the rest of us. I think this may result regardless of what the bond market does.
I did inquire of Bond Girl as a specialist whether or not there really would be a systemic crash - I don't really know - and I would hope that your scenario - sorting out the good and the bad - would be the result, and the muni market would be OK.
Clearly the political will for never ending bailouts has faded, and even if the Admin wants to do it, I think Congress will resist going along, and the administration won't fight them. I think the administration would rather get health care.
This isn't just CA. What happened to NJ which is almost in as bad as shape? What about Ohio? MI, SC,NC, VA ...
What about the pension funds for these employees that is also cratering?
I wrote some on my ongoing story...
Wow, now this was different. The President appeared on camera sitting behind her desk wearing military camo. No rank insignia that I could see. I wondered if she had a cute little beret to match. What came after should not have been a surprise, yet for me at least, it was. It was probably more of a surprise, as was the general state of the economy, becase I had disapeared for 2 years into my basement insulated by my money. I wasn't exposed to the slow slide into squalor that everyone else was. They were used to the insanity that was the new reality. I was still adjusting. The realization that the old rules that had bound me for so long were disengrating as fast as the society around me was rather pleasant. New possibilities began to glimmer in the back of my head.
A couple of my formerly wealthy clients, for whom health care was no problem,
are getting sick with high blood pressure etc, from stress, and health care is
becoming a problem for them.
"Let them fend for themselves" was an exaggeration to make a point. In no way do I actually support that position. If the states start cannibalizing each other, we have a much bigger problem than an economic downturn. California has deep politicial and structural problems and I would like see them addressed in the current budget. If California crashes, it will affect a great many other states through lower federal redistribution of taxes.
Wasn't there some Russian that predicted the break up of the U.S. into 4 regional countries within 5 years? I hope not.
you are an incurable romantic who believes in history: "I thought that concept of the Union had been settled for some time."
but, of course, you are right.
will that stop the Governor of Texas from pandering to the fringe by touting the prospects of seccession? no, probably not. but he wanted swine flu meds from the feds, too
RATM, I dont live in Cali, so dont follow things there as closely as some, but it seems to me from the other comments thaat the Cali gov't is hoplessly and structurally disfunctional. Seems to me that TARP like conditions on a bailout could be the knife to cut the gordian knot. Force them to change the state constitution. For example a requirement to get rid of the supermajority provisions for raising taxes, force renegotiation of union contracts, esp regarding pensions. Essentially try to force a prepack BK on them, using Ch ( as an overall bluprint, even though it is designed for municipalities not states.
Even out taxation by balancing income and property taxes (repeal Prop 13), bring sanity to criminal justice (repeal 3 strikes, release drug offenders), restore the Car Tax ($4-5$ billion a year), and eliminate the 2/3 rules on budgeting and taxes . . . and the problem would be solved. Chnaging the districting laws and repealing term limits would help a lot, too.
I think you've more or less nailed it. I always get a chuckle out of uber-conservatives who stomp and bitch about "public sector spending" and "public unions" and simultaneously fall all over themselves to enact ever more draconian laws - failing to acknowledge or recognize that the largest public union sector in Cali is the Prison Guards union and that one of the very largest expenditures is the wasteful use of tax dollars to incarcerate non-violent offenders.
This is the other reason I look forward to Option B...it seems in America, we will cling to our broken ideological dogma until it literally blows up in our faces..fine, so be it. After they close all the schools, and cut off all the "safety net" spending, and things still blow up...whee. I'm really, really glad I don't live out there.
LL - no, it is just a slow descent in squalor. The failure of services in a society like ours that prizes being independent will lead to a lot of people falling through the cracks in stunned despair
I have got to write up an unber nerd on California. For a quarter century the Feds have been decanting far more from the State than they've returned. For the last generation the State has been spending more than it collected, even in the occasional so called surplus years. For the last decade single party politics has prevented any potential effective governance. For the last half dozen years the initiative process has allowed special interests to hogtie budget flexibility. In short, California's problems are structural.
Hoops and longtimelurker got cali's problems right,and the ccpoa is a big part of the problem.Prison guards get 40% of all the wages cali pays.The only Infrastructure Cali invested in is prisons...the state Government is completely dysfunctional and can not be fixed,it is like a junkie running a wholesale pharmacy.
I just don't like that the Federal gov't will be dictating the terms of the "pre-packaged" BK. I saw what they did with GM, AIG, and Chrysler. We will never get the money we "invested" in GM back. California needs to fix its own problems. The people of California need to be strong enough to fix their own problems. I imagine a FedGov bailout will come with lots of arbitrary and not necessarily good conditions and piles of money.
Coming from Cali, I have to agree that the rest of the country should not enable California's continuing dysfunction unless there is a balanced set of moves that address revenue, spending, and debt.
We need a reset of our government here, eliminating 2/3 rules on budgets and taxes, restructuring our tax system, and addressing the problem of public employee pensions and retiree medical cost.
As a price to add higher sales taxes and bump the car tax back up partially, Republican legislators extorted a 2 billion a year corporate tax cut that gives the vast majority of its benefits to large multi-national corporations. This adds on to another seven billion a year in state tax cuts, and the debt to pay for the borrowing to pay for the tax cuts, that have been enacted since Arnold took over.
liz, you are correct. It'd be outside the scope of the spending clause, and more importantly, it'd be federal interference in the basic political functions of a state.
California doesn't need to file BK. The primary function of BK is for protection and settling of claims against creditors. Since the state is sovereign, it does not need protection from creditors. furthermore, it can unilaterally abrogate any contracts that it entered unless prohibited by its own constitution. of course, the repercussion would be future lenders' strike.
Nova,
My solution of 5-8 separate States saves face and kills a number of birds with one stone. Unfortunately the Federal Congress will never approve it as it radically stifts the balance of parties to the Rs.
I listened to an interesting discussion on To The Point with Warren Olney (KCRW) with a group of Cali experts, and the only real solutions seems to be convening a new constitutional convention to re-write the state constitution. This is not so radical as it may sound - Cali has had a couple of them, following state insolvencies like the one faced now - and so have other states It is the 1/2 majority referendum and 2/3 majority legislative percentages, above and beyond all else, that cause the hamstringing.
I think the important ta ble to look at is table 5 where there is a breakdown of some of the costs to/from states and US
Unfortunately it seems that this report includes Social Security (as it lists retirement and disability costs). This is listed as a benefit to the states Table 4 gives taxes paid.
I think that if one stripped out SS one gets a different picture.
BTW look at the paytments that go the the rugged individualists of Palinland
Wouldn't that destroy the muni market for all states?
I just pointing out the legal argument; that as sovereign, Cali has the same default options as Argentina or Russia. However, a Cali default might actually create a "flight to quality" in the muni market. But maybe not. Anyone got the stones to find out?
It is interesting how much magic "California" still contains. It is as much a state as it is a symbol, perhaps even a lens which people project a lot of baggage.
New Jersey which is in pretty bad shape will never get this kind of attention. Nor does the death of Detroit resonate with anyone except for the negative "magic" of a bygone era.
broward (homepage, profile) wrote on Sat, 6/13/2009 - 8:13 am
eliminating 2/3 rules on budgets and taxes, restructuring our tax system
Come on, Dawg, say it.
"California does not have a revenue problem, it has a spending problem"
"California does not have a revenue problem, it has a spending problem"
Furthermore, listening to some of the "solutions" being proposed will make things worse. Eliminating the 2/3rds req makes the entire Republican delegation irrelevant. It also assumes that with unfettered taxing power the budget can be balanced. The State just raised the sales tax. Result? Lower revenues. With some places charging 10.25% and most at lest 8.75% the informal economy has flourished. Oh, and Prop 13. It is the sole bright spot in the budget.
LL, you may indeed have a point about the constitutionality of it, have not really looked into it However, in return for DIP financing from the fed, Cali might be willing to agree to it. As for the "what ratings are supposed to be for" well recent history of S&P/Moody's/Fitch does not lend much confidence.
California and most other blue states have indeed been ripped off by the red welfare states for decades. But "The Peepul" voted for all those supposedly "structural" problems in California, especially the three strikes law and massive prison buildup. Interestingly, people in other states did not vote for those things. In the east, many of the states have constitutions that are harder for The Peepul to amend, and that turns out to be an advantage.
Fla was rejoicing, 'cause with less immigration from the frozen north, one less
prison had to be built, and it was indeed cancelled. Would have it been cancelled
if we were Cali?
Right now California has 2 Senators and 53 congresscritters. Plus one for
2000 versus 1990. We added 4.7 million to snag that next seat. How about
Georgia who added 2 seats? Yup, they added 2.1 million. Arizona +2 seats,
2.0 million. Better than 4:1 disparities.
To answer your question, 8 States can carefully be designed to get more than
70 seats in Congress. The break up would put several in the "sweet spot" of
the formula and the small population, large area sierra states would get
their mandatory 1 regardless of population.
PC Pacifica; SF peninsula and environs. (PC as in
Politically Correct, (even Hillary Clinton could get elected.)
MC Centro or Sierra; Central Valley plus mountains. (America's
Vegetable Drawer.)
AC Alta or Upper California Northern counties. (Big High Country.)
CC Costa California Ventura to Monterey - Tehachapis/Coastal Range.
(Alternative Aurocosta, Gold Coast.)
LA Angeles; All the Miserable urban crap, social problems,
etc. LA, Orange, Riverside, Antelope Valley, San Berdoo.
(Lousiana can take LS for their abbreviation)
SC From Sud California San Diego, Imperial and environs. (Alternatives
Imperial or just tell South Carolina to buzz off.)
OR --
WC Wacko California. SF peninsula and environs. Obvious.
CC Centro California. Central Valley, mountains.
PC Pacifica. Northern counties and Oregon.
This leaves Washington State to move its' new capital to Vancouver.
California is in fact at the very least 6 states. A map of
Southern California alone would entirely cover New England to Penn.
Not only that but the shapes, amount of coastline and population and
economy are roughly comparable.
Q. [What's your like of separation between Wacko &
Pacifica, and Wacko & Costal?]
A. Marin can go either way... Don't go there!
Q. I still think Ventura belongs in L.A.
A. (serious for a minute) LA thinks that. They need the good air,
landfill sites, growth expansion, etc. If you were to look at aerial
photos it would be obvious that there WERE reasons why Vta did not
become
like Orange County or San Berdoo. You can actually see the border from
the air.
In fact linear proximity is the only factor that puts Vta in LA's
sphere of influence.
SC Sudo (Pronounced Pseudo) California. San Diego, Imperial and
environs. For all the lighthearted description above; the areas have
geographic, historical, economic justification. We need more
Senators, representative state govt, federal clout, regional
solutions, etc.
I know this derived from the concept that city transportation
boundaries are ineffective but the conclusion is inescapable. CA is
too big.
Each state would be among the top 20 most populous, or largest, or richest
states in the union. The idea that the Ventura County Superintendent
of Schools needs more votes to win than Senators from Montana is
weird to say the least. When people refer to LA County Supervisors as
"Their Lordships" without smiling and they each represent multiple
congressional districts something is wrong with California's political
structure. Transportation is one symptom of political dysfunction.
In the next 17 months CA will add the population of Wyoming. Can we
get another US Senator every 34 weeks forever? We deserve them.
California would then be beholden to its creditor. DIP financing sounds fine in theory, but what are the details? I think it would basically be central planning by the government in DC.
Albt, I agree that constitutions should be hard, but not impossible to change, on of the reasons the US one has worked out pretty well all things considered. They are supposed to prevent the passions of the moment from changing the structure of the law. The idea that 50.1% of the vote can change the constituon is pretty silly. Not totally against being able to do so by pop referendum, but to change the constitution a supermajority should be needed, something like ti has to pass by 65% or something.
Why would the current political system allow for a new state Constitution? They will lose.
California is like a low-IQ trust fund brat. Estimates are CA spends ~ $13B on illegal immigration ever yyear. Of course this estimate includes both anchor babies and illegals. Primarily the health care costs, and education costs. That's why the people were smart enough to pass Prop 187 years ago. Except the politicians vacated the Prop 187 fight, because those politicians happened to disagree that illegals were a problem. Just think; 3 years of not paying $13B (which is a conservative number) is $39B; and that means the state would theorhetically be running like a $15B surplus. That's not to say it's not a problem.
The problem is immigration policy lately always comes down to "states can't do it, only feds" and none of the Federal government has done this for like 10-15 years! This has shifted the financial burden to the states without any recourse! And its not even like Bush pretended he cared about enforcing immigration law . Hey, we have laws for a reason, but I guess we'll only enforce the little bs like speeding, parking tickets, and other nickel and dime crimes; while we won't do anything about illegal employers; who offload their health-care burden onto the taxpayers.... yeah that $6/hour gardener is probably costing a lot more than $6 if you factor in all the taxes you have to pay. Oh but let's fear monger about $10/lettuce...
. It also assumes that with unfettered taxing power the budget can be balanced. The State just raised the sales tax. Result? Lower revenues
Yes, i expected that.
It's going to be true in general for most of the States and the Feds.
Laffer curve is pretty much at the peak point, only downward play in both directions.
Sixty years of Pavlov conditioning is mighty hard to break, though.
Sure. Walking from a house has become more of a business decision than a stigma.
more than the level of price decline it is borrower behavior that will determine what the value of these securities are. It seems to me (since I have seen much commentary on this) that policy makers are still expecting people to maintain their past behavior with regard to making the monthly mortgage payment. Having set the precedent that it is ok to stiff lenders in favor of unions I don't know how one can criticize somebody who decides to walk away from their mortgage . If people who could pay but are unwilling to pay start defaulting things could get a whole lot worse.
Like with any mass disobedience movement if enough do it there will be little stigma and even fewer consequences. Are landlords really going to be able to be fussy about renting to somebody who has defaulted? There wouldn't be anybody to rent to!
If they banks offered the mods a year ago that they are offering now, the mentality
would have not got established and princes would have dropped less and
more slowly.
It's too late now.
Only thing that will work is really big cramdowns.
When it is hard to lease because of bad credit, relatives who have good credit
sign the lease. Edited to add not.
If people who could pay but are unwilling to pay start defaulting things could get a whole lot worse.
Six Flags Seeks Chapter 11 Bankruptcy Protection The amusement park company Six Flags is seeking Chapter 11 bankruptcy protection, saying it needs to reorganize and shed $1.8 billion of debt....
Six Flags says it actually had a great year in 2008. It saw 25 million visitors and posted record revenues. But executives are trying to lighten a $2.4 billion debt load that they say is unsustainable.
I think most people would be profitable if they could get rid of 75% of their debt load.
Are you a title theory or lien theory state? That is, do you have foreclosure by posting or do
you have to file a lawsuit.
If you have to file a lawsuit, a deficiency judgment can be asked for in the lawsuit. Don't know
how you would find that in a database, either here or there. I know 'cause I have a ringside
seat, and would have personally observed it or heard the gossip.
Don't know what they do in a title theory state. I guess they'd have to file a lawsuit, which
makes it even less likely.
Illinois is lien theory. So, once they go to foreclosure, they've already filed a suit, and there's less reason not to go ahead and ask for difeiciency judgement?
Ca has lost its majority middle class. and has become a democratic system of class warfare, with the lower classes, in the majority, voting to confiscate the wealth ot the upper classes. As is so often the case, Ca is leading the nation on this one. Welcome to the future with a minority middle class.
everybody complains about illegals but nobody is shy of taking advantage of the lower prices that illegals make possible.
We should stop picking on illegals who are only trying to what all us try i.e. earn a living and take care of their families. It is the employers and their customers who are villains.Make employers who hire illegals serve some jail time. If the jobs are not there illegal immigration will decrease automatically.
Agreed bobn, but here they don't. You have to adduce proof of the value lost. Then
you have to squeeze the money out of the proverbial stone. People who supinely
let you foreclose would prolly fight this. Can you imagine?
You made me a loan I couldn't possibly pay back and now you want the difference that
you knew I couldn't pay. And besides there was fraud on your side.
In Fla the court system is semi collapsed right now. If they added deficiency hearings--
which would take far longer than the 5 minute motion calendar that most foreclosures
are relegated to, it would enter total collapse, right now and I'm not kidding.
Unless Charlie Crist uses that incredible bump up in foreclosure filing fees to
enlarge the court system, which I've haven't heard one way or t'other.
Housing prices won't stop falling until we get positive net on jobs. The high-end 1 million plus can keep on falling for years after the lower end bottoms.
Dirk,
$13B is gross; $9B is net. This is from FAIR. Of course there is a disincentive for people pro-illegal to present the proper accounting. Arnold admitted a number $5-6B; so it is not at all unreasonable to expect the true number is $9B. Again, FAIR also includes anchor babies effect, this might account for $3B as well.
Comrade Alexi Mahalovich... If you disagree with the number I challenge you to read and respond to the report.
Also I haven't seen this LA Times exercise linked at all. You try balancing the California budget. It's fun! Play around with it and you'll understand why so many have reasons to block any cut.
"Eliminating the 2/3rds req makes the entire Republican delegation irrelevant."
No, it is the other way around. The granting of a virtual veto power to a nearly homogenous and increasingly extreme politica party that barely polls 1/3 in the legislature is against the grain of democracy and it entrenches an irresponsible party leadership that keeps the party irrelevant, except for its special veto power.
Eliminate the veto power by eliminating the 2/3 requirement and the repub party in California will have to compete for relevance . . . just like parties in democracies are supposed to do.
It is the employers and their customers who are villains.Make employers who hire illegals serve some jail time.
This has the added benefit of being potentially enforceable. After all, if you deport a hundred illegals, there seems to be a ready pool to take their place.
"if the Calimorons had even taken a few baby steps to try to save themselves, I would be sympathic."
......I still wouldn't be sympathetic. I was born and raised there, invested a TON of money & time, have family, ties, and friends still there, and the legislature has never grown up and learned anything resembling fiscal responsibility in 30-years. The morons work in Sacramento.
The granting of a virtual veto power to a nearly homogenous and increasingly extreme politica party that barely polls 1/3 in the legislature is against the grain of democracy
Apparently you woke up in a different country than I did.
I completely agree with the sentiment that its an employer problem as well. We have no problem shredding up the Constitution vis-a-vis "terrorism"; we can make a few adjustments to how we use Social Security numbers and "no match" on the e-verify program to essential make this problem go away. Simple; if you employ someone who is a "no match" social security number, than you have 30 days to correct it, if that person is not fired; you are in jail. But for some reason Social Security has been exempted from any of these new fangled Patriot Act invasion of privacy BS we've had since 9/11. We make e-verify mandatory with IRS penalties.
The politicians have no interest in solving our problems... this has been evident since I've been to CA and had a huge wake-up call on what "illegal immigration" really is. Of course on the flip side I believe we do need a reasonable guest farming program (bracera?) but we already have one in place... just one look at the fields of Oxnard and Ventura counties... how come white people aren't doing that backbreaking work?
"if the Calimorons had even taken a few baby steps to try to save themselves, I would be sympathic."
Yep, we're idiots. It hardly matters whether we're one party or two. But California's fall isn't going to be pretty. It's not like the rest of the states are models of fiscal restraint and good governance. Wait until you get the flood of emigrants.
A friend of mine was telling me about someone she knows in Florida that has stopped paying the mortgage on two condos that they rent out and they are going into foreclosure. They haven't told the tenants and are just pocketing the rent for as long as they can ride it out (something about needing the money to make payments on a BMW). Both my friend and I think its a pretty scummy thing to do but my guess its pretty common. Any laws in Florida that help the tenants. Only thing I could think of was maybe there are notification requirements where the owner must tell tenant about foreclosure proceedings. Or maybe there's a clause in some leases that provide for this, though I doubt it.
NYT: AIG Balks at Claims from US Airways Plane Ditch on Hudson
Teaser: For the first couple of days after his flight ditched into the Hudson River, Paul Jorgenson was just glad to be alive. But then he started to need his laptop, his wallet, his car keys — all the essentials he had stowed under his seat and left behind in the sinking plane. A pleasant woman at US Airways told him not to worry; he would be made whole for his losses. But then the matter shifted to US Airways’ insurer, the American International Group, operating under government stewardship since its bailout last fall.
16 weeks is a very very long time in credit default riskland if you consider even the week to 5 June figures from DTCC - unless my comma analysis has shorted out, $15T notional of CDS written, on 2m contracts.
lawyerliz,
So are if you don't give your secretary a raise are you willing to accept a lower-standard for her lower-wages? Is there some type of deal where you can give her less hours at a "raise" and she can work part-time elsewhere? Or is she someone who is supplementing a spouse, living within their means and is just providing herself with some "wallet money".
Sorry about not being able to pay your claim but we spent it all on bonuses.
Any wonder A.I.G. is removing logos from its' headquarters, badges, etc...
Pitchfork and torches time.
If I was on that AIG flight I would've taken the $5k from US Airs straight to a law-firm. I know there is some sentiment that lawyers suck. But let me just say, not if you are paying them. From my experience the lawyers I have hired have been worth the hourly fees.
YSLP, I do not think the guest worker program is useful. First of all the government sets the wage (Obama administration just announced they are going that route). Guess how that will go with time. The Unions will take over the program if it is run by the government.
The next problem is that growers have to hire workers ahead of time. In many crops you do not know exactly how much labor you will need or when you will need it. If fruit comes in early or late or heavy or light there is limited flexibility with a program that requires you to hire months ahead. Is the government going to allow you to cut hours of the employees while you wait for work for them? Another down side is that growers have to arrange housing. That will not be esy in a NIMBY state.
From the workers perspective they would rather have the power to move from grower to grower looking for the best opportunity. If they are treated badly they can leave. If they are not making much per hour they can leave. Remember, that harvesters are often paid piece rate. They can make $1,000 a week if there is a good crop. Many harvesters move up the coast from grower to grower following the peak of the crop.
The solution is simply an ID card that workers can present to a grower in lieu of a SSN.
i've been thinking of phoenix. my oldest son starts at ASU in august. I think i can get most of the employess to come along and the remainder can telecommute.
HomeGnome,
gonna start making copper bracelets for boomers with arthritis.
Just about the only growth industry around here. I still have to get my lazy butt moving and sell a bunch of stuff on ebay before things really head south. We will most likely shut down state government here in Zonie land at the beginning of July for a couple of days, and that will give me the time.
w,
I was referring to the farmworkers program that is already in place. There's already a legal guestworker program; I think it's working.
I pass the fields every morning and see the workers there... to me they look like modern day slaves, bent over picking strawberries all day long... of course it is their choice to come here and work in the fields to stay here. I just have no idea how someone gets that job. Some days I want to go there at 6AM and see what they do. It looks grueling, and I think using some type of solar powered robots might be a solution at some point... not sure how you can get them to delicately identify and pick crops... but it would be nice use of stimulus money... oh wait we used that to prop up old industries.
Well. it is not dramatic if you think about it. If unemployment keep rising another 3% and internest on mortagegs go up as well, I can see it happening.
What's odd about this article is that unlike most media coverage it makes clear that the AIG policy doesn't cover all incidents but only covers losses caused by the negligence of the airline, so it's quite possible that there is not a valid claim against the insurance, but still AIG is perceived to be acting unreasonably and "playing hardball" because they aren't going to pay until their legal obligations are clarified.
Why do people think insurance companies are bottomless sinkholes of capital there for the taking every time something bad happens, whether the insurer actually covered the incident or not?
I for one am glad that the company isn't giving away taxpayer money by immediately paying every claim that comes in the door.
OT ALERT:
My wife and I took 15 LARGE squash and a whole bunch of green beans to one of the local mens'/ womens' shelter this morning.
Totally organic and GnomeGrown.
They had better tell the tenants. A good many tenants will leave when they are notified
of the foreclosure proceeding. Some few will stop paying. The landlord can evict them
and put someone else in there.
We discussed this several weeks ago. The banks could ask for a receiver to be
appointed, but they never do. Then the tenants could pay the receiver, but that
might earn them no brownie points when the foreclosure was over. Unless they got
something in writing.
The tenants could find out who the lender is and then start to pay the rent to
the lender. They'd still get evicted & the lender might return the money!
Rent skimming as it is called in Cali is illegal here, but you have to do it on more than
1? more than 2? units and you have to prove guilty intent. I n Fla,
Henh, henh, the tenants could go to court by themselves and ask for a receiver and
to pay the money to the receiver. Never heard of anybody doing that, but they are
a defendant, and have standing. Don't know if there is any benefit but revenge.
teabagger,
get all of your stuff started and move over.
You won't see your son except on sundays when he shows up to do laundry.
Let 'em telecommute and 1099 'em.
Taxes here are very small in comparison to the "Golden State"
Worker's comp, unemployment taxes (well they are going up soon), state income taxes- all half of California or less.
Rent for now though- buying is for suckers. Locate your office or house close to the airport for easy access to LA and the rest of the west.
The funny part is the local folks think they need incentives for large manufacturers to show up.
har.
Small business is far more profitable.
"Only thing I could think of was maybe there are notification requirements where the owner must tell tenant about foreclosure proceedings."
Slick Dog, LawyerLiz can give you a more informed answer than I can, but I can relate my experience as a tenant in a Florida condo in foreclosure. I was named in the action, and served, as "Tenant in Possession". I knew the foreclosure process had been initiated before the landlord did.
Yalt,
I'm leaving the thread: but doesn't one have a reasonable expectation the plane is not going to land on the Hudson? Does this mean if the plane had crashed and everyone died they wouldn't have a claim either? That damn bird; flying without insurance! It's all that bird's fault.
When there's insurance, people that this crazy idea it must cover something. If I bought plane insurance, I'd have this wild idea it would cover a plane crash.
Do you really think that even one of those workers is here legally?
There is a lame government attempt at a guest worker program but it is totally useless. Like I said, the government is determining the pay rate, and you have to arrange labor months ahead of when you need it. The workers have no flexibility to follow the work from grower to grower. Very very very very few growers use this program.
Where are we now? (from the Baseline Scenario):
"Financial markets have stabilized – largely because people believe that the government will not allow Citigroup to fail. We have effectively nationalized any banking system losses, but we’ll let bank executives enjoy the full benefits of the upside. How much shareholders participate remains to be seen; there will be no effective reining in of insider compensation"
"More broadly, there is sophisticated window dressing in the pipeline but no real reform on any issue central to (a) how the banking system operates, or (b) more broadly, how hubris in finance led us into this crisis. The financial sector lobbies appear stronger than ever. The administration ducked the early fights that set the tone (credit cards, bankruptcy, even cap and trade); it’s hard to see them making much progress on anything – with the possible exception of healthcare"
"The consensus from conventional macroeconomics is that there can’t be significant inflation with unemployment so high, and the Fed will not tighten before late 2010. The financial markets beg to differ – presumably worrying, in part, about easy credit leading to dollar depreciation, higher import prices, and potential commodity price inflation worldwide. In all recent showdowns with standard macro models recently, the markets’ view of reality has prevailed. My advice: pay close attention to oil prices"
The Fed-Banker complex is slowly grinding this country to dust.
Yeah I'm not that sympathetic to claims beyond out-of-pocket losses, actually. No, there is no strict liability for airlines, evidently. Not sure if there is a no-fault type payout for crashes.
AIG still had $1600 billion exposure in financial "insurance", the last time CEO LIddy testified. The fireworks begin when he tries to extort another round. What's to stop Tim from funneling the returned TARP money back to the big banks through AIG?
Back on topic for a second. Lots of those underwater types are still paying. Any Idea of how far
underwate they are? More underwater, more walkies-walkies?
One woman in the article is trying to get AIG to pay for 'counseling to stave off PTSD'.... she could be genuine but this is the typical kind of scam people run when they think they can get some $$$.....
Doesnt the insurance company normally negotiate a settlement with the injured party and pay them a single amount and the recipient signs away all liability....
That's why we do No-Fault in NY for car accidents. No damages for pain and suffering, or emotional distress, unless you meet a threshold for "serious injury".
I would hate to see CA try to write a new constitution.... also if anything happens to Prop 13 there will be a lot of older people forced to sell because they wont be able to pay higher property taxes... That could add a lot onto the price slide of houses.... It's the legislature's job to come up with a balanced budget, and the state is already way overtaxed... Wait - just tax that rich guy over there - the one who is making $32k/yr... he is way richer than all those poor people that we have to help....
lawyerliz wrote:
Back on topic for a second. Lots of those underwater types are still paying. Any Idea of how far
underwate they are? More underwater, more walkies-walkies?
I know people who can pay but are not paying to try to force a mod. I also know people who are underwater, but continue to pay as agreed.
My unsubstantiated guess is that most people who can pay will continue to pay until they can't due to job loss or major illness, etc.
We are still paying, in spite of being 25% underwater on the mortgage- after having put 20% down.
We are in the process of asking Sh*tibank for a mod- we have found out they still own our paper too,
so one would think they would just give us the 2% rate reduction we have asked for.
But not yet.
I still may just hand the place back to them and say eat it.
They keep pushing refi, also, which would abrogate my ability to "Walk Away" due to nonrecourse.
So we push for mod, and keep paying. Although my wife is finally getting fed up about it.
Since she desires to keep the place, the mod is the only thing that makes sense.
Given the magnitude of the potential loss, the bank should be modding at lightspeed to keep us happy.
Is there an update to to Italy story? Bberg said probably fakes. $500 million face value from 1934, no such thing as Kennedy bond. Very interesting if some counterfeiter thought he could fence them for 10% or less, expecting little scrutiny if the bubble pops.
Thank you. As always, you are a wealth of information. I'd also looked around in CR's achieves on this and found a very good piece by Tanta from last August. You were active on the comment thread that day. Here's the link in case anyone is interested its very good:
In addition to an investment of $20 billion in Citigroup, the government plan also guarantees up to $306 billion in risky loans. This is on top of the $25 billion the government has already pumped into Citigroup.
sorry, Allen M, don't think Citi cares one wit about you.
"Baby Born On NYC Mass-Transit For Second Straight Day"
.....what did they do? Push the baby back in to be delivered the second time tomorrow? Perfect example of idiots writing headlines. Do they think "spellcheck" assists in this problem too?
Yesterday Bond Girl pointed me to an article - bearer bonds have been illegal since 1982 - These are fake, who knows what the motivation was.... might not actually be any crime committed...
I'm leaving the thread: but doesn't one have a reasonable expectation the plane is not going to land on the Hudson? Does this mean if the plane had crashed and everyone died they wouldn't have a claim either?
I'd have to see a copy of the policy itself to say, but if the description in the NYT is accurate, no. Insurance policies cover what's in the contract, not every possible event of which there's a "reasonable expectation" that it won't happen.
Liability policies cover the airline's liability due to a lawsuit brought by another party against the airline due to some sort of negligence or malfeasance by the airline. No negligence, no fault, no lawsuit, no covered claim. AIG's not paying anybody until suits are filed against the airline. When they are, they may or may not (depending on the contract language and the facts of the case) cover the airline's defense against the suit. Nothing's going from AIG to the passengers until those lawsuits are settled.
Standard liability policies require a "negligent act" as a condition for coverage. The precise language varies--sometimes it's possible to get the language softened because firms are worried that they'll be left without coverage against frivolous lawsuits regarding events for which they're not at fault. But softer language means a higher premium--assuming it's available in the marketplace at all. And even if the policy doesn't explicitly require "negligence" it at least require some legal liablity on the part of the airline.
The way I see it, either
US Air wanted to save money on their insurance and bought something less than the best coverage available, or
The coverage they seem to be implying they have simply isn't available in the aviation marketplace now, or
US Air hired an agent that has misinformed them about the coverage they bought.
Or, more likely, a combination of all three. I seriously doubt that there's any aviation liability policy available that would cut checks to passengers immediately after a crash before any legal actions have even commenced, much less been settled. This isn't homeowners insurance; it just doesn't work that way. That the airline was apparently telling passengers everything would be covered makes me think they're getting some really terrible advice, either from their attorneys or their insurance agents or both.
If essential services are cut, I would expect that people would stay home to defend their property instead of going to work too... Could get pretty ugly, particularly in the inner cities...
From what I have seen, only for Americans. And 1982 sure would be been a good time to get hold of some 30 years... Internationally they are very popular for moving vast sums of money around, with minimal paperwork. Plus, who knows what the other hand was up to with things like Iran-Contra, No-bid Haliburton contracts and other Black-ops stuff.
"might not actually be any crime committed..."
I will wager that Secret Service/Treasury will have a very different view.
Re Goldman bonds and swaps - if CA could get their spending under control they wouldnt need to borrow money in the first place and this would all be moot... It's the spending that's the problem, at every level of govt... Govt interference in the marketplace distorts everything with the inevitable consequences...
Blackhalo: ...Plus, who knows what the other hand was up to with things like Iran-Contra, No-bid Haliburton contracts and other Black-ops stuff....
I'm with you on this one.
But as weird as the bond story is, mix in "guns for indirected cash" for some illicit third party, or some other shenanigans, and it gets rapidly weirder.
And to boot, The Sting inverts the meaning of it all.
And I always thought it WAS the token clerk's duty to be nasty...
"The New York Court of Appeals recently held that the common carrier liability rule--a century-old legal theory that imposes absolute liability on common carriers for their employees' misconduct--is no longer viable in that state. (Adams v. New York City Transit Authority, No. 95, 1996 WL 220767 (N.Y. May 2, 1996).)
The case arose from an alleged assault on Margaret Adams at a New York City subway The New York City Subway is a rapid transit system owned by the City of New York and leased to the New York City Transit Authority , an affiliate of the Metropolitan Transportation Authority and also known as MTA New York City Transit.
...
Adams sued the Transit Authority, claiming that a token booth clerk verbally and physically attacked her after she asked the clerk for directions.
Finding the common carrier rule "no longer viable as a matter of law or policy," the New York high court concluded "that the token booth clerk's assaultive conduct, which was indisputably outside the scope of her employment, does not give rise to vicarious liability on the part of her employer." "
I see that most every viewpoint on California's politics and economy has already been posted.
I thought it was interesting that I agree with Rob Dawg that California's problems are structural in nature since the odds are pretty good that he and I would not agree on the solutions or even the details of the problem.
But I am looking forward to 2010 redistricting having an impact on the impasse in Sacramento.
Proposition 11, passed in November 2008 by a whopping 50.8% of the vote, changes the authority for establishing Assembly, Senate, and Board of Equalization district boundaries from elected representatives to 14 member commission and provides guidelines.
Since the conservative area in which I live has been gerrymandered to provide multiple Republicans with some votes each, there is in effect no one representing my area. That will likely change after 2010.
ShadowInventory (profile) wrote on Sat, 6/13/2009 - 9:53 am
I would hate to see CA try to write a new constitution.... also if anything happens to Prop 13 there will be a lot of older people forced to sell because they wont be able to pay higher property taxes... That could add a lot onto the price slide of houses.... It's the legislature's job to come up with a balanced budget, and the state is already way overtaxed... Wait - just tax that rich guy over there - the one who is making $32k/yr... he is way richer than all those poor people that we have to help....
It won't just be older people, it'll be everyone. Businesses would be so disadvantaged that those that don't leave will die. They aren't going to triple property taxes on people like me because that would crush our property values and defeat the purpose and while that won't put those of us with substantial equity underwater it will push all the rest into default thus defeating the intent.
I cannot stress this too much; California is in trouble because its taxes are too high and its spending too high and its services to taxpayers too low. Higher taxes and/or lower services are not going to help at all.
Dirk,
$13B is gross; $9B is net. This is from FAIR. Of course there is a disincentive for people pro-illegal to present the proper accounting. Arnold admitted a number $5-6B; so it is not at all unreasonable to expect the true number is $9B. Again, FAIR also includes anchor babies effect, this might account for $3B as well.
Report is here. It is a 2004 report. No one has done anything better.
Comrade Alexi Mahalovich... If you disagree with the number I challenge you to read and respond to the report.
FAIR upfront admits they have an axe to grind, but they don't know how to use their grindstone.
Am I supposed to believe that somehow net expenses of illegal immigrants in a decade rose from $1bn to $8.8bn, while the illegal population (according to FAIR) doubled? Reading through their (lack of rigid) methodology, calling it a "pull it of their ass number" is being quite generous.
Fitch is fuckin* right and on the same page that I'm reading and only retards would be betting on recovery!
Fixed mortgage rates typically track the yield on the 10-year treasury note. "The 30-year mortgage tends to have roughly the same [sensitivity to interest-rate changes] as a 10-year treasury," says T.J. Marta, a fixed-income strategist at RBC Capital Markets. Historically, the typical difference between mortgage rates and the 10-year treasury yield—known as the spread—has been roughly 1½ percentage points. In the mortgage industry, the difference between these two rates is often referred to as a "risk premium."
30 year fixed mortgage rates are currently about 5.67%, thus how will this impact refinancing if in 6 months mortgage rates are closer to 6.53. I would suggest BAC growth will slow significantly, as will home sales.
"Since the conservative area in which I live has been gerrymandered to provide multiple Republicans with some votes each, there is in effect no one representing my area. That will likely change after 2010."
I wish Texas had something similar. In and effort to give W more friendlies in the house, Perry had a mid decade redistricting that split Austin five ways, with districts stretching from the coast to Austin and Austin to the border.
From the article linked by C, on GS telling clients to bet against CA bonds they underwrote :
"Some experts said the investment bank's actions, while not illegal, might be inappropriate. "That's not a good way to do business," said Geoffrey M. Heal, professor of public policy and business responsibility at Columbia University. "They've got a conflict of interest and they're acting against the interest of their customers. . . . You act in the interests of your clients. You don't screw them, to put it bluntly.""
Other experts would want to know more about the representations GS made to CA in collecting their millions in fees, before they dismiss illegality.
You might find this crazy but I think the feds will orchestrate a DOWNTURN in the markets in the next few months. Not that they want to but it will be the lesser of evils. A flight to safety will mean stronger $US which will cause oil to go down and treasuries up (yields down - so Ben can take his vacation) as investors flee equities. Lower mortgages and oil will help the average citizen more than any 'confidence' gained from a rising stock market (and does it really mean anything to the bottom 80% of wage earners? Do they actually own much?)
The banks have already raised a lot of additional capital in this run up which is what I think was one of the main purposes of the 'green shoots' campaign. I have no doubt they can push the markets higher - much higher, but it would much easier to do a replay of the first half of '09. A 5000 point roundtrip which would earn those in the know cough Wall Street cough a whole lotta coin.
I think of it as the feds pumping the brakes. Inflate a bit then let some air out then repeat the process as much needed
Re: Bonds
Well, there was a Treasury Secretary named Kennedy under Nixon. Perhaps that is why these are being called "Kennedy Bonds"? I don't know how many bonds were issued under him however; nor who bought them. I doubt it was $134B to Japan...
I dont think I worded that well. .... I should have said why should legislative districts span city or county boundaries? Perhaps all the legislators should be elected at large by the entire state.... and we could have a lot less of them... That might not be any better though - fewer people to bribe by the lobbyists... Common sense just isnt all that common....
And another friggn thing, as we can see with The Fed data, MZM may have peaked, in terms of people saving cash, but IMHO, that may be a factor related to inflation, i.e, people are saving less cash, because they are spending more in this jobless recovery. Thus, as Treasury yields recover and Treasury prices decline, that will encourage savings and also increase mortgage rates, during a time when historical inventories are being dumped, thus Fitch is spot on, it will take at least 2 years to burn off inventory -- but if mortgage rates increase, that will slow demand for home purchases, as will a lack of jobs and increased inflation. We have at least 3 to 4 years before we see any daylight and the great risk, is that foreclosures are increasing, adding to inventory! There is a foreclosure filed every 13 seconds! Take that to the bank, and then ask BAC and other banks how they will increase EPS!
"Why should the legislative districts be any different than the city and county areas? "
Because they're based on population.
Well, actually, he has a good point. Political subdivisions should remain intact wherever possible. Carving up population centers into fingers pointing in different directions is done for one purpose only and it's not a good one.
Also I haven't seen this LA Times exercise linked at all. You try balancing the California budget. It's fun! Play around with it and you'll understand why so many have reasons to block any cut.
That's interesting but they needed some different options. Even with all the spending cuts presented you'd end up with a $840+ million gap. There needed to be a "default on union government employee contracts, renegotiate"
Actually, Shadow, what I thought you were saying was that the integrity of local political boundaries (e.g., cities and counties) should be respected wherever possible when districts are created.
If the current level of credit support was considered insufficient to cover projected losses, the security was written down to fair value with a corresponding “other than temporary impairment” charge, in accordance with accounting guidelines, equal to the difference between book and market value.
How in The F are banks going to recover in this jobless recovery? If banks do not have earnings and have to resort to accounting fraud sponsored by The Fed, SEC, DOJ, FBI and Congress, then how does one value fraudulent assets in terms of overvalued real estate loans and adjustments to reserves that are not realistic or legal?
This is all about perception and conning people into thinking they can start using credit cards again and MEW!
Worryingly, the report's gauges of inflation expectations rose to their highest in months, creating concern for the Federal Reserve, which has pumped money into the financial system to spur recovery from the worst recession in decades.
For the third month now the overall consumer sentiment reading was at its highest since the Lehman debacle last September, which caused severe strains in financial markets, while not breaking through that month's level of 70.3.
Cali IE home sales prices previously around $250/sf are now frequently below $100/sf, many at $75, some at $50/sf. At some even lower price, continuing to pay homeowners premiums based on their estimate of "replacement costs" of $200/sf, and continuing to pay Riverside RE taxes based on 1.25% +/- of 2005-06 purchase prices of $250-$350/sf, looks like an idea whose time has passed.
When there's insurance, people that this crazy idea it must cover something. If I bought plane insurance, I'd have this wild idea it would cover a plane crash.
But wait, how silly of me!
You're a lawyer; you know better than this.
The passengers on the plane didn't buy "plane insurance". They didn't buy any insurance at all and have no standing under the AIG policy; all they did was contract with the airline to get taken from A to B. The only claims they might have are against the airline resulting from (a) tortious wrongdoing on the part of the airline or (b) failure of the airline to carry out their part of the contract.
The insurance policy is a contract between AIG and the airline to cover (a) above. If the airline decides, as they probably should from a public relations standpoint, to give some compensation to the passengers outside their responsibilities under tort law, that's not AIG's problem.
Any contractual liability probably isn't AIG's problem either, as it's ordinarily explicitly excluded from liability policies. Simply put, your contracts are between you and your customer and don't automatically put your insurance company on the hook for your losses under contracts to which they aren't even a party.
To be honest, the way things worked out the whole AIG policy is something of a red herring. Unless somebody on board was carrying billions in treasury bonds in their briefcase I doubt that all the out of pocket expenses of all the passengers put together wouldn't come anywhere close to the policy deductible.
Let's see--$134.5 billion in TARP money left over, $134.5 billion in bonds seized in Italy, US Treasury Secretary Tim Geithner attending the G8 meeting June 12 and 13 in Italy. Hmmm.
Well, Wyoming gets a US Senator for every 6 people, I want to at least make sure I get per capita representation somewhere. Obviously, there having been only a couple of black senators in the history of the United States despite about 13% percent of the population being black, the system needs tinkering. In a parliamentary system there is wider representation of minority groups. The party in power always looks to redistrict, subject to occasional judicial oversight.
"Let's see--$134.5 billion in TARP money left over, $134.5 billion in bonds seized in Italy, US Treasury Secretary Tim Geithner attending the G8 meeting June 12 and 13 in Italy. Hmmm. "
If you have not seen Frontline's 10 Trillion and Counting, and Black Money, I would HIGHLY recommend them.
I think the rules for lost property are governed by Federal Law to a large extent, but the airline is a bailee of your luggage, and would under common law be responsible for its value regardless of negligence.
like the banking bailout politicians are doing what their master tell them. How many of those wonderful gated communities in CA and FL would survive without illegals to do the house and yard work? What about all those two income families that depend on illegals to the child care. As I said like the banking bailout it makes more sense to stick the general tax payer with the bill while arguing for a tax cut for the wealthy.
As a progressive I am strong advocate for States Right. While it might not matter much in the very large states (CA, Fl, TX and NY) the remainder of us will be much better of with power and revenues being returned to the States. Living in Vermont I am quite certain that our individual voices can compete with the special interests. The Federal government is no longer a protector of individual rights- gay marriage is a case in point. I think we need to realize that this is not the 50s.
For a quarter century the Feds have been decanting far more from the State than they've returned
In the double-dip '81-'83 recessions there developed in CA an "association of disassociating counties" hoping to stop sending up more money to the state than was perceived to coming back. Maybe an association of disassociating states is the way to save CA and other states and end the federal train robbery.
California is not so much over taxed or under taxed, but mostly badly taxed.
Prop 13 is a disaster because property taxes are more stable than income and sales taxes. Sales taxes are the worst, most regressive and most volatile.
Meanwhile, big corps just got a $2 Billion tax break this February, 2009, in the middle of the budget blow out. Oil and gas extraction pays no tax......
California is not in the top ten states for total taxation of its residents. Yes, higher income tax and sales tax, but lower property tax.
Ending Prop 13 need not throw old people out of their homes. Normal states give property tax breaks to seniors on fixed income. California could do the same.
The recovery is a forest. People have let their credit cards go, and don"t have mortgage payments it looks as if we are spending more and people have disposable incomes again. Actually, savings are getting drained and there are no new jobs. We are in the calm before the storm. People are spending what every little cash they have left on eating out and shopping for smaller ticket items. This will come to an end in 6 months. There are no new jobs. Can you hear the quiet in America?
This is priced in, right?
nah. just backstopped
Hang on, they quote 36% in two different ways in the space of three sentences. Is it an additional 36%, or 36% from peak.
Still sounds like "u r skrood", but at least the skrood level should be consistent, no?
C
.....-36% more in CA. That's sizable.
Yesterday, I had to make the rounds for the critter's foods. I finally took notice of what's lived in and what's been abandoned. It's quite remarkable - even here. Unlike an urban area, when the housing here is spaced so far apart as it is, it has REALLY emptied out..
The depression is contained to California
From what I hear more and more people who are underwater and in trouble consider that paying their mortgage is optional. It would be month and month before anyone tries to evict them.
Sure. Walking from a house has become more of a business decision than a stigma.
Another 36%? That sounds pretty dramatic.
of these 3 areas - N Korea, Iran and CA - which will blow up first?
4th half recovery.
It's possible. For Miami, another 10% off means houses sell at 45 cents on the
dollar.
Who owned those securities?? Where are they going back to? m
Where are they now? Why were the Italian police so uncommonly
dilligent? Were they bribed to "find" them.
Like the Kennedy assassination, we will never know.
Another 36 percent in my California town would place would still place home ownership beyond the means of the average income here at this point in time (Mark!). I'm expecting 50 percent, as unemployment rises and mortgages fail. This is Alt-A land here; our Doom Time begins next year.
Well, the countdown to Cali boom is now 47 days. Iran and N. Korea could last longer.
this is OT/ but I was surprised that that Security Council vote would go through on the North Korean issue...
most of their supplies come across one bridge over the Yalu into China...
The rating agencies are just going crazy with the downgrades right now. They missed the boat and now they are trying to make up for it, I guess.
Well, one supposes gravity is reasserting itself. That's pretty grim...how will this affect the banks...how many will need additional capital? Or are these bonds AIG backed?
Hmmm, what if those bonds had been found crossing the border into Cali?
What ever happened to Debtors Prision and wage Garnishment?
Aren't HELOC's "recourse loans", even in CA?
There appear to be no empty houses in my immediate neighborhood.
Except for 1 or 2, we've all been here for ages. There is a gated community a
mile to 2 away which I wonder about.
Oh, no recourse is raising its head again.
Gotta slap it down.
Forget recouse, just forget it ok?
All Florida loans are recourse and in fact deficiency judgments are a
matter of right.
They are NEVER asked for. Never. Still never. I don't understand why.
Bad publicity? Uselessness? People will just file bk?
In Fla, it would involve the banks spending money, an extra legal step to
file something asking for the money, and then proof the value wasn't
there, and then you'd have to collect it.
Good luck with that.
The foreclosure mills are paid a pittance. They are not gonna do extra
work for free, and the banks are completely and totally overwhelmed.
And, frankly, I can't imagine a judge granting one at this point. They are
elected. Except in a very unusual circumstance.
I thought Fitch was actually fairly good and comparatively early with downgrades. I wonder what that 2010 stability is made of - do we grind down slowly until then? Is there further downside, beyond 2010, among the late-to-the-wake areas like NYC?
We know that the Citi never sleeps--but CR should. Thanks for being both the early bird and the late bird.
I'm reposting this.....Multiple choice for Americans, due July 1st given California budget deadline:
(a) Bailout about California in 2009 to the tune of $30B or so by the time it gets done. Bailout out California again in 2010, 2011, and 2012 while California voters simultaneously increase spending for things such as public sector pension spending through the ballot initiative process. Buy stock in kneepads for the next 3 years.
(b) Do not bailout California and watch the municipal bond market melt apart. Could be worse than Lehman Brothers and kick off the "second slope down" part of the W-shaped recession.
American taxpayer, the choice is yours. As Denis Leary once said please try to get your whole head in front of the shotgun before pulling the trigger.
I lifted this from streeteasy.com, which tracks sales in NYC. This is just for condos, not coops, townhouses etc. Hopefuly, it will stay formatted. Site is great for watching the inventory build-up, and the days an apt. is listed, then relisted by another brokerage. Seriously, compared to Cali, we have a long way to go.
Manhattan Condo Listings Snapshot
Size (ft²) $ per ft² Price
Studio 536 1,130 599,000
1 BR 791 1,105 870,000
2 BR 1,307 1,232 1,645,000
3 BR 2,000 1,470 3,030,000
4+ BR 3,089 1,699 5,500,000
Medians for listings from past 60 days from StreetEasy data. Excludes some extraordinary properties. No representation is made as to the accuracy of this data.
Another 36%? That sounds pretty dramatic.
That made spit a little of my coffee, but thinking it through, I can reconcile it. What's scary is that this is a ratings agency, rather than an opinion writer, with greater consequences for overstatement.
Sonoma County is down more than 30% YoY,and a further 36% drop would not bring sustainable prices in a strong economy.our economy is cratering...
As far as recourse goes... it does seem that the lenders don't ever do it. In CA, technically, the loan is no longer non-recourse if they borrower has refi'd or taken a 2nd/HELOC. This would open up judgements to an awful lot of borrowers.
The thing that frustrates me is not so much the borrowers who bought at the top and got stuck, it's the people who had a reasonable loan and then HELOC'd themselves way in over their heads. To think that we are supposed to now help borrowers that took, often-times, hundreds of thousands of dollars and just spent it on living expenses, cars, vacations, whatever.... ugh. I cannot muster one ounce of pity for them. Even the fact that they no longer get a 1099 on this forgiven money doesn't seem right. If someone gave me a quarter million dollars, I'd have to pay taxes on it.
Which is worse,
Do you have a bias? The way you phrased the question makes it sound like you favor (a). I fail to see how (a) is a better choice than (b). (b) would mean we take our medicine now, (a) would be another attempt to kick the can down the road a little bit farther.
i met a couple of idiots who wanted to move to sonoma county after seeing "sideways."
you don't pay taxes on a loan.
What can I say. When you start a corporation, you loan the corp money, rather than hand it
all over, so when you get it back it's a return of principal, rather than a taxable distribution,
or if an S corporation, taxable once when paid. When that runs out, then you have to pay income
taxes.
That is pretty close to the sum of my tax knowledge.
This has never particularly bothered me.
i met a couple of idiots who wanted to move to sonoma county after seeing "sideways."
lol, I hated that movie.
I chose B. The muni mkts will take a hit for a while and then people will begin to
realize that there are good muni mkts and bad ones, and bid accordingly.
I think this is a good thing.
$30 billion is about 1.8% (+/- 30%) of the gross state product of California.
That doesn't seem worth crashing the system for.
(I'm long California, having just moved here, and don't understand fully what the problems are.).
I chose B too.
deb is referring to the fact that debt forgiveness is normally taxed as income because it is an "accession to wealth"
Did you buy a house, Rex?
Ftich seems to have been marginally better than S&P or Moody's, but that said the percentage bet would be that the ratings agencies continue to be behind the curve...
yikes
lawyerliz (profile) wrote on Sat, 6/13/2009 - 7:16 am
Did you buy a house, Rex?
Wiser minds prevailed (the ones here mainly) and we will rent for 12-18 months and then peek outside again. This market is moving very slowly and is still overpriced. Thank you to CR and the 'nodes. And to you for asking!
i choose option (C). Jam the pension benefits through the PBGC, giving the pensioners the legal max of $54K. At that point, CalPERS and CalSTRS would be massively overfunded and then could return funds back to the general fund.
American taxpayer, the choice is yours.
Horsesh*t. We'll have no say on the choice at all. Just like all the other "choices" we've been subjected to over the past year. Therefore, I assume we'll get (a).
RATM, I hope you encouraged them. No, really. [Sonoma]
But if you don't pay it back, then it's money that you received tax free. They essentially received cash money, unlike a purchase money loan. That's why I don't have a problem with a 1099 for this kind of debt forgiveness, especially for those that really abused the system. Of course, often, collecting these taxes would be like getting "blood from a stone".
Good idea Basel, except the difference should be handed to PBGC.
That doesn't seem worth crashing the system for.
But it's California's problem. California's finances are not the responsibility of any other state.
I think what was mean that since the system won't crash, then let Cali
suffer. Maybe I misread.
It takes hard work to be the number one financial blog, and it definitely shows! I do plan to contribute, laid off at the moment)
We are all number one now. (here)
47 days of cash on the wall,
47 days of cash,
if one of those days should happen to fall,
46 day of cash on the waaalllll.
To the tune of 99 bottles of
.
that idea never happen, mainly because Wall Street would lose access to a $500B slush fund.
what's really pissing me off right now are the public unions that are agreeing to forgo benefits and to increase contributions BUT NOT FOR CURRENT EMPLOYEES AND RETIREES, only future employees.
gee thanks for that sacrifice...
"sideways did boost the price of premium pinot grapes,and that helped a couple of my friends who have small vineyards.However we already have a surfeit of idiots.One requirement for getting involved in local government is that you must no longer need drugs to be delusional.They take them anyway...
"i met a couple of idiots who wanted to move to sonoma county after seeing "sideways."
Yup, they're idiots alright. Sideways didn't take place anywhere near Sonoma Co.
Who has jurisdiction if a state goes bk?
Sideways didn't take place anywhere near Sonoma Co.
All wine country is the same, just like all mountains are the same.
Who has jurisdiction if a state goes bk?
States can't go bankrupt. They just default. It might be time to write an uber-nerd FAQ on this topic.
Re: Sideways
I couldn't understand why I should empathize with an overweight balding guy who can't pick up girls and likes to drink wine. He was a loser, and that movie was depressing. Maybe I missed the "message".
Sideways didn't take place anywhere near Sonoma Co.
Yeah but the Pinot's better in Sonoma than it is in the central coast. Maybe they weren't complete idiots after all.
Mel wrote:
Who has jurisdiction if a state goes bk?
AFAIK, there is no law to handle a state BK. The state courts would determine the state's liabilities in that case. Or, they pass out IOUs or clownbucks.
Look at the California Controllers latest report.
In California, on a statewide basis, year-to-date sales tax collections were down 11.8% while income taxes are down 20.7% from last year's totals through May. If the definition of depression is down 10%, then we're past that mark.
New housing starts are down 84%. The state has lost 26% of its construction jobs, compared to 16% nationally, and 7% of its retail jobs, compared to 4% nationally.
The draconian cuts to California's state budget being pushed by the Worst Governor Ever threaten to send another devastating wave of job cuts through the economy.
Nobody's done the math on the fiscal effects of the twenty billion in spending cuts proposed by the Governor, but let's take some guesses.
Including money lost in federal matching funds, and the multiplier effect, let's say the total lost economic activity is somewhere around 35 billion. That's 2.3% of the state's 1.5 trillion gross product gone, 3.5 billion in state and local taxes gone, 400,000 more unemployed, an unemployment rate jumping another 2% (and it's already at 11%), thousands of people forced into nursing homes because their home health care coverage disappeared, higher medical insurance rates for those with coverage, another billion dollar hit to our unfunded debt for unemployment insurance, thousands of additional failed small businesses, tens of thousands of additional homeless people, tens of thousands of additional homeowners pushed into default and foreclosure.
California's in a depression, and spiraling downwards.
Why should this be a problem for the rest of the country?
AFAIK, there is no law to handle a state BK. The state courts would determine the state's liabilities in that case.
That's not a problem, that's an opportunity.
if the Calimorons had even taken a few baby steps to try to save themselves,
I would be sympathic. Why should Floridians, who are trying, and other states,
pay money to Cali? Sounds like extortion.
Come on liz, think about the children!
@lawyerliz,
Don't forget that for decades California has been supporting the rest of the states through Federal taxes. Cali gets back a lot less money from the Federal government that it sends. The excess money is distributed to other states. Sounds like extortion at the federal level, no? Cali would not have any budget woes if it stopped sending federal taxes to D.C.
I'd love to see a list of all the bottom calls for housing from Fitch.
what's really pissing me off right now are the public unions that are agreeing to forgo benefits and to increase contributions BUT NOT FOR CURRENT EMPLOYEES AND RETIREES, only future employees.
Generational warfare.
if the Calimorons had even taken a few baby steps to try to save themselves,
I would be sympathic. Why should Floridians, who are trying, and other states,
pay money to Cali? Sounds like extortion.
The state's government has been totally taken over by a powerful party machine that draws its own electoral districts and as a result whose incumbents are essentially impossible to vote out. California is a microcosm of the disease affecting the national government. They citizens of california are not "morons," they're powerless. The leaders of the California state government aren't morons, they're crooks, and a great number of them intend to move out of state after they're done doing a stint in the capital "getting theirs."
"if the Calimorons had even taken a few baby steps to try to save themselves,
I would be sympathic. Why should Floridians, who are trying, and other states,
pay money to Cali? Sounds like extortion. "
It's extortion by the current political system, trying to save itself. The one thing Arnold has right is to wave Armageddon in everyone's faces; only thing is, he's overstated his case so many times before in so many different situations, no one believes him.
Yes, we're in trouble... but a lot of it is the wrong mix of taxes, the wrong system for distributing and controlling $$$. What other states don't understand is just how much local control, through funding, the state has over the operations of municipalities and school districts. Too many cooks, nothing works right.
Yes, it has to die.
I am thinking about Fla's children.
And why didn't Cali make a stink about this long ago?
if the Calimorons had even taken a few baby steps to try to save themselves,
I would be sympathic
Struck a nerve did it?
I think it was Rob, sometime last week, who pointed out there is nothing terribly wrong with California's state programs or even staffing levels - that it was compensation and benefits which had departed reality. I'm no expert on the state's condition, but the observation rang true for me as I've noticed it elsewhere.
The proposed job cuts look like government lashing out in frustration. A pretty picture. And not the only possible approach, evidently.
Forget recouse, just forget it ok?
LL,
Do you think this would apply for everywhere else, too?
I'm in IL, also supposedly recourse as I understand.
Ok, ok, sympathetic. Hahahahahahahah
And the crooks are being moronic, 'cause there isn't gonna be any "theirs" to get
in 47 days.
Well, bobn, you tell me. are deficiency judgments being asked for?
The Governator wanted to sell state landmarks and prime real estate (San Quentin, LA Coliseum, etc) , but this week he discovered that california is in a real estate slump that would depress prices and also that it would take 2-5 years to get the money from the sale.
Then the Governator heard from county sheriffs and municipal police and fire departments about his plan to close the State's budget gap by raiding county and local taxes. That plan is now off the table.
Perhaps running on the campaign to roll back the "Car Tax" wasn't such a good idea, was it, Arnold? It has cost the state $16 Billion.
Oh, and for Rob Dawg bait, watch this neat little video from the Chairwoman of the California Assembly Budget Committee, which does a fine job of explaining the sources of the budget deficit and the inability of the state to address the problem under its current constitution.
Another 36% drop in real estate from Q1 seems reasonable to me.
And the crooks are being moronic, 'cause there isn't gonna be any "theirs" to get in 47 days.
I'm tempted to propose a tip jar wager on that one. Why would this be the first can to not get kicked down the road? I say in 47 days we'll have a "California Czar", and he or she will make everything better.
Don't forget that for decades California has been supporting the rest of the states through Federal taxes.
Inflate house prices by 300%, collect property taxes on the appreciation, take out HELOCs, IO ARMs, NINJAs, drive the newest, hottest car with the newest hottest arm candy in the newest hottest clothes. Man, you guys were so rich.
How much of that Federal revenue would you say was from "worthwhile" things versus the FIRE economy?
What are the Governor's budget proposals re public health services?
The source of California's budget deficit is graft, plain and simple.
There will be a first in non-can kicking.
I think this will be it.
MLM - kinda agree. A full-blown state BK would test the system from the constitution through tort law, RoL, fiscal and monetary policy, and social and civic order.
Never let a good crisis go to waste...
C
lawyerliz wrote:
I am thinking about Fla's children.
And why didn't Cali make a stink about this long ago?
California doesn't control how the federal government spends money. Are you saying we should let each state fend for itself? I am all for that,
In 2004, Florida received $1.02 for each federal tax dollar it sent to D.C. California received $0.79. So California has been subsidizing Florida. You are right, that should stop.
Mississippi received $1.77, Alabama $1.71, WV $1.83. Let them fend for themselves.
For all the details, see this report
.
"There will be a first in non-can kicking."
Interesting if so, Liz.
"In 2004, Florida received $1.02 for each federal tax dollar it sent to D.C. California received $0.79. So California has been subsidizing Florida. You are right, that should stop.
Mississippi received $1.77, Alabama $1.71, WV $1.83. Let them fend for themselves."
Don't we call this country the United States, not the Confederacy?
Don't forget that for decades California has been supporting the rest of the states through Federal taxes.
I've always wondered about this calculation. Does it include the hundreds of billions in government backstops of bad Cali real estate? I'm guessing not, especially if paid to private corporations (e.g. BAC, WFC) even if the macro effects are the same as if spent by the feds. And I'm 99.9% positive it doesn't include Federal Reserve asset purchases.
Sounds like Florida is pretty even.
Cali has a pretty big congressional delegation. Bet the locals who were feeding in the federal
trough didn't care that those who weren't were losing big.
What are the Governor's budget proposals re public health services?
http://wavs.unclebubby.com/wav/MOVIES/T2/clothes-boots-bike_t2.wav
pavel,
I was making a point. It was LL that was berating CA for not being as fiscally responsible as Florida, but it is not that simple.
May I have a serious answer? I think it is an important question, and may become more important as we enter the flu season this fall.
Let them fend for themselves.
I agree. Let everyone deal with their own problems at the state level. Obama might try to bailout the states in a federal power grab. I would guess that a California bailout would have all sorts of conditions a la TARP, and then they try to use that deal as a precedent for other states. I hope it doesn't go that way.
Yup about more 18 mo. of RRE still tanking, CRE getting crushed, continuing unemployment ( U6 around 20%), decreasing consumer spending ( 70% of GDP ) should be enough 'Roundup' to keep those 'green shoots' from sprouting and keep recession going strong !
Let them fend for themselves.
OK, but the price for water, power, and oil is headed up. I think we can get $.21 or so that way.
I hardly meant to imply that Florida was an example of fiscal soundness
to hold up to the world, just that we were far less bad. And there are lots
of cuts that are really happening here. I'm sure we don't pay our prison
guards like Cali!!
hoopajoops
California legislators are subject to tight term limits laws passed by referendum. No more than two terms in any one seat. The result is a short time horizon, little development of skill, and little power.
The districting fiasco in California is actually best enjoyed by the radical wings of both parties. The majority party, Democrats, are large enough to have a big middle that compromises. The republicans are, relatively speaking, much more extreme and homgeneous.
The constitution that sets up the 2/3 votes on budgets and taxes gives the minority party the power to freeze the government. Together with voter referenda that impose unfunded mandates (3 strikes led to a doubling in prison population and mega power for the prison guard's union) and mandate percentage distributions of the budget, this is a disaster . . . i.e., the roots of the disaster.
Even out taxation by balancing income and property taxes (repeal Prop 13), bring sanity to criminal justice (repeal 3 strikes, release drug offenders), restore the Car Tax ($4-5$ billion a year), and eliminate the 2/3 rules on budgeting and taxes . . . and the problem would be solved. Chnaging the districting laws and repealing term limits would help a lot, too.
Oh, and for Rob Dawg bait, watch this neat little video from the Chairwoman of the California Assembly Budget Committee, which does a fine job of explaining the sources of the budget deficit and the inability of the state to address the problem under its current constitution.
California Assembly Member Noreen Evans Representing the 7th Assembly District - Biography
forgot to add the link
@ OC Progressive (homepage, profile) wrote on Sat, 6/13/2009 - 7:32 am
Look at the California Controllers latest report.
Underscoring the severity of California's cash crisis, Controller John Chiang, who has previously warned the state's government risks running out of cash without a budget deal, said revenues in May fell by $1.14 billon, or 17.7 percent, from a year earlier.
Cali needs more ka-ching for Chiang
"In 2004, Florida received $1.02 for each federal tax dollar it sent to D.C. California received $0.79. So California has been subsidizing Florida. You are right, that should stop.
Mississippi received $1.77, Alabama $1.71, WV $1.83. Let them fend for themselves."
Comrade Coinz, I was reacting to the apparent notion of some of us here that the states are semi-independent countries which owe one another little responsibility. I thought that concept of the Union had been settled for some time. There is a centrifugal tendency that needs to be countered constantly, a sort of political torque. In fact, as long as there is free movement of all sorts within the US we are one country.
@LawyerLiz: I think what was mean that since the system won't crash,
The last time this question was posed, I opted for B also, largely because I think it might actually cause system crash, and in so doing, bring a lot of crap down on our heads - and maybe shut up the "it's Cali's problem" claim. I am not sympathetic to California's broken mess, but I fear that letting them tank will have bad repercussions for the rest of us. I think this may result regardless of what the bond market does.
I did inquire of Bond Girl as a specialist whether or not there really would be a systemic crash - I don't really know - and I would hope that your scenario - sorting out the good and the bad - would be the result, and the muni market would be OK.
Clearly the political will for never ending bailouts has faded, and even if the Admin wants to do it, I think Congress will resist going along, and the administration won't fight them. I think the administration would rather get health care.
Agreed in O preferring to get health care.
This isn't just CA. What happened to NJ which is almost in as bad as shape? What about Ohio? MI, SC,NC, VA ...
What about the pension funds for these employees that is also cratering?
I wrote some on my ongoing story...
Wow, now this was different. The President appeared on camera sitting behind her desk wearing military camo. No rank insignia that I could see. I wondered if she had a cute little beret to match. What came after should not have been a surprise, yet for me at least, it was. It was probably more of a surprise, as was the general state of the economy, becase I had disapeared for 2 years into my basement insulated by my money. I wasn't exposed to the slow slide into squalor that everyone else was. They were used to the insanity that was the new reality. I was still adjusting. The realization that the old rules that had bound me for so long were disengrating as fast as the society around me was rather pleasant. New possibilities began to glimmer in the back of my head.
site: afterthecrash.net
plus there is a post from energycon...
I fear that letting them tank will have bad repercussions for the rest of us.
I don't think there is a market friendly solution to any of this. That's the bottom line. Right now people are trying to find a painless way.
A couple of my formerly wealthy clients, for whom health care was no problem,
are getting sick with high blood pressure etc, from stress, and health care is
becoming a problem for them.
No worries... Cramer says this is THE housing bottom, the final one. Right here, right now.
"Let them fend for themselves" was an exaggeration to make a point. In no way do I actually support that position. If the states start cannibalizing each other, we have a much bigger problem than an economic downturn. California has deep politicial and structural problems and I would like see them addressed in the current budget. If California crashes, it will affect a great many other states through lower federal redistribution of taxes.
Wasn't there some Russian that predicted the break up of the U.S. into 4 regional countries within 5 years? I hope not.
May I have a serious answer?
CA is not a topic for serious discussion.
Besides, the first bailout has started.
Others will follow.
"No problemo".
Dead State Walking.
Music from the soundtrack to this summer's hottest horror story...
YouTube - Dead Man (Soundtrack) by Neil Young
C
We should be thinking of heading to a system that is better and will last for a while after
the pain is over. We are not.
Pavel
you are an incurable romantic who believes in history: "I thought that concept of the Union had been settled for some time."
but, of course, you are right.
will that stop the Governor of Texas from pandering to the fringe by touting the prospects of seccession? no, probably not. but he wanted swine flu meds from the feds, too
RATM, I dont live in Cali, so dont follow things there as closely as some, but it seems to me from the other comments thaat the Cali gov't is hoplessly and structurally disfunctional. Seems to me that TARP like conditions on a bailout could be the knife to cut the gordian knot. Force them to change the state constitution. For example a requirement to get rid of the supermajority provisions for raising taxes, force renegotiation of union contracts, esp regarding pensions. Essentially try to force a prepack BK on them, using Ch ( as an overall bluprint, even though it is designed for municipalities not states.
Is that the horror movie with the mean mtg collector? Saw the trailer.
I thought the choice of villian was amusing.
Don't ever, ever foreclose on a witch.
@longtimelurker
Even out taxation by balancing income and property taxes (repeal Prop 13), bring sanity to criminal justice (repeal 3 strikes, release drug offenders), restore the Car Tax ($4-5$ billion a year), and eliminate the 2/3 rules on budgeting and taxes . . . and the problem would be solved. Chnaging the districting laws and repealing term limits would help a lot, too.
I think you've more or less nailed it. I always get a chuckle out of uber-conservatives who stomp and bitch about "public sector spending" and "public unions" and simultaneously fall all over themselves to enact ever more draconian laws - failing to acknowledge or recognize that the largest public union sector in Cali is the Prison Guards union and that one of the very largest expenditures is the wasteful use of tax dollars to incarcerate non-violent offenders.
This is the other reason I look forward to Option B...it seems in America, we will cling to our broken ideological dogma until it literally blows up in our faces..fine, so be it. After they close all the schools, and cut off all the "safety net" spending, and things still blow up...whee. I'm really, really glad I don't live out there.
Here is the link to the Russian professor that predicts we will not make it to the next election cycle as one couintry
.
I don't give it a high probability, but state insolvencies may test his hypothesis.
LL - no, it is just a slow descent in squalor. The failure of services in a society like ours that prizes being independent will lead to a lot of people falling through the cracks in stunned despair
I would opine that none of that would be constitutional, Dirk.
Any con law scholars out there?
I have got to write up an unber nerd on California. For a quarter century the Feds have been decanting far more from the State than they've returned. For the last generation the State has been spending more than it collected, even in the occasional so called surplus years. For the last decade single party politics has prevented any potential effective governance. For the last half dozen years the initiative process has allowed special interests to hogtie budget flexibility. In short, California's problems are structural.
Dirk,
You may have found the solution, a federally forced prepack chapter 9 for CA. That would be a better outcome than others I can imagine.
Hoops and longtimelurker got cali's problems right,and the ccpoa is a big part of the problem.Prison guards get 40% of all the wages cali pays.The only Infrastructure Cali invested in is prisons...the state Government is completely dysfunctional and can not be fixed,it is like a junkie running a wholesale pharmacy.
RD,
In short, California's problems are structural.
If you are right. and I hope not, structual problems can only be fixed through a rather messy process for the people who happen to use that structure.
Dirk,
I just don't like that the Federal gov't will be dictating the terms of the "pre-packaged" BK. I saw what they did with GM, AIG, and Chrysler. We will never get the money we "invested" in GM back. California needs to fix its own problems. The people of California need to be strong enough to fix their own problems. I imagine a FedGov bailout will come with lots of arbitrary and not necessarily good conditions and piles of money.
Coming from Cali, I have to agree that the rest of the country should not enable California's continuing dysfunction unless there is a balanced set of moves that address revenue, spending, and debt.
We need a reset of our government here, eliminating 2/3 rules on budgets and taxes, restructuring our tax system, and addressing the problem of public employee pensions and retiree medical cost.
As a price to add higher sales taxes and bump the car tax back up partially, Republican legislators extorted a 2 billion a year corporate tax cut that gives the vast majority of its benefits to large multi-national corporations. This adds on to another seven billion a year in state tax cuts, and the debt to pay for the borrowing to pay for the tax cuts, that have been enacted since Arnold took over.
liz, you are correct. It'd be outside the scope of the spending clause, and more importantly, it'd be federal interference in the basic political functions of a state.
California doesn't need to file BK. The primary function of BK is for protection and settling of claims against creditors. Since the state is sovereign, it does not need protection from creditors. furthermore, it can unilaterally abrogate any contracts that it entered unless prohibited by its own constitution. of course, the repercussion would be future lenders' strike.
Nova,
My solution of 5-8 separate States saves face and kills a number of birds with one stone. Unfortunately the Federal Congress will never approve it as it radically stifts the balance of parties to the Rs.
eliminating 2/3 rules on budgets and taxes, restructuring our tax system
Come on, Dawg, say it.
"California does not have a revenue problem, it has a spending problem"
@Rob Dawg
In short, California's problems are structural.
I listened to an interesting discussion on To The Point with Warren Olney (KCRW) with a group of Cali experts, and the only real solutions seems to be convening a new constitutional convention to re-write the state constitution. This is not so radical as it may sound - Cali has had a couple of them, following state insolvencies like the one faced now - and so have other states It is the 1/2 majority referendum and 2/3 majority legislative percentages, above and beyond all else, that cause the hamstringing.
it can unilaterally abrogate any contracts that it entered unless prohibited by its own constitution.
Wouldn't that destroy the muni market for all states?
Wouldn't that destroy the muni market for all states?
I think "destroy' is a strong word.
How about "cripple"?
RE: see this report
which presents flow from and to states.
I think the important ta ble to look at is table 5 where there is a breakdown of some of the costs to/from states and US
Unfortunately it seems that this report includes Social Security (as it lists retirement and disability costs). This is listed as a benefit to the states Table 4 gives taxes paid.
I think that if one stripped out SS one gets a different picture.
BTW look at the paytments that go the the rugged individualists of Palinland
I repeat, I think it would be bad for a while and then things would sort themselves out.
This is what ratings were supposed to be for.
Wouldn't that destroy the muni market for all states?
I just pointing out the legal argument; that as sovereign, Cali has the same default options as Argentina or Russia. However, a Cali default might actually create a "flight to quality" in the muni market. But maybe not. Anyone got the stones to find out?
It is interesting how much magic "California" still contains. It is as much a state as it is a symbol, perhaps even a lens which people project a lot of baggage.
New Jersey which is in pretty bad shape will never get this kind of attention. Nor does the death of Detroit resonate with anyone except for the negative "magic" of a bygone era.
broward (homepage, profile) wrote on Sat, 6/13/2009 - 8:13 am
eliminating 2/3 rules on budgets and taxes, restructuring our tax system
Come on, Dawg, say it.
"California does not have a revenue problem, it has a spending problem"
"California does not have a revenue problem, it has a spending problem"
Furthermore, listening to some of the "solutions" being proposed will make things worse. Eliminating the 2/3rds req makes the entire Republican delegation irrelevant. It also assumes that with unfettered taxing power the budget can be balanced. The State just raised the sales tax. Result? Lower revenues. With some places charging 10.25% and most at lest 8.75% the informal economy has flourished. Oh, and Prop 13. It is the sole bright spot in the budget.
I think it would be a good thing for a state not to be able to borrow money for a
while. Scare the heck out of the rest of 'em.
'Course there is that public health/swine flu thing. I'd be willing to let Fla chip
in with that.
LL, you may indeed have a point about the constitutionality of it, have not really looked into it However, in return for DIP financing from the fed, Cali might be willing to agree to it. As for the "what ratings are supposed to be for" well recent history of S&P/Moody's/Fitch does not lend much confidence.
Wouldn't that destroy the muni market for all states?
California is broke. People will have to more accurately price risk.
California and most other blue states have indeed been ripped off by the red welfare states for decades. But "The Peepul" voted for all those supposedly "structural" problems in California, especially the three strikes law and massive prison buildup. Interestingly, people in other states did not vote for those things. In the east, many of the states have constitutions that are harder for The Peepul to amend, and that turns out to be an advantage.
True, Dirk, very true.
As a non Cali person, I'd like to ask what the car tax is?
Sounds like they wouldn't be collecting much these days.
Fla was rejoicing, 'cause with less immigration from the frozen north, one less
prison had to be built, and it was indeed cancelled. Would have it been cancelled
if we were Cali?
Right now California has 2 Senators and 53 congresscritters. Plus one for
2000 versus 1990. We added 4.7 million to snag that next seat. How about
Georgia who added 2 seats? Yup, they added 2.1 million. Arizona +2 seats,
2.0 million. Better than 4:1 disparities.
To answer your question, 8 States can carefully be designed to get more than
70 seats in Congress. The break up would put several in the "sweet spot" of
the formula and the small population, large area sierra states would get
their mandatory 1 regardless of population.
PC Pacifica; SF peninsula and environs. (PC as in
Politically Correct, (even Hillary Clinton could get elected.)
MC Centro or Sierra; Central Valley plus mountains. (America's
Vegetable Drawer.)
AC Alta or Upper California Northern counties. (Big High Country.)
CC Costa California Ventura to Monterey - Tehachapis/Coastal Range.
(Alternative Aurocosta, Gold Coast.)
LA Angeles; All the Miserable urban crap, social problems,
etc. LA, Orange, Riverside, Antelope Valley, San Berdoo.
(Lousiana can take LS for their abbreviation)
SC From Sud California San Diego, Imperial and environs. (Alternatives
Imperial or just tell South Carolina to buzz off.)
WC Wacko California. SF peninsula and environs. Obvious.
CC Centro California. Central Valley, mountains.
PC Pacifica. Northern counties and Oregon.
This leaves Washington State to move its' new capital to Vancouver.
California is in fact at the very least 6 states. A map of
Southern California alone would entirely cover New England to Penn.
Not only that but the shapes, amount of coastline and population and
economy are roughly comparable.
Q. [What's your like of separation between Wacko &
Pacifica, and Wacko & Costal?]
A. Marin can go either way... Don't go there!
Q. I still think Ventura belongs in L.A.
A. (serious for a minute) LA thinks that. They need the good air,
landfill sites, growth expansion, etc. If you were to look at aerial
photos it would be obvious that there WERE reasons why Vta did not
become
like Orange County or San Berdoo. You can actually see the border from
the air.
In fact linear proximity is the only factor that puts Vta in LA's
sphere of influence.
SC Sudo (Pronounced Pseudo) California. San Diego, Imperial and
environs. For all the lighthearted description above; the areas have
geographic, historical, economic justification. We need more
Senators, representative state govt, federal clout, regional
solutions, etc.
I know this derived from the concept that city transportation
boundaries are ineffective but the conclusion is inescapable. CA is
too big.
Each state would be among the top 20 most populous, or largest, or richest
states in the union. The idea that the Ventura County Superintendent
of Schools needs more votes to win than Senators from Montana is
weird to say the least. When people refer to LA County Supervisors as
"Their Lordships" without smiling and they each represent multiple
congressional districts something is wrong with California's political
structure. Transportation is one symptom of political dysfunction.
In the next 17 months CA will add the population of Wyoming. Can we
get another US Senator every 34 weeks forever? We deserve them.
in return for DIP financing from the fed
California would then be beholden to its creditor. DIP financing sounds fine in theory, but what are the details? I think it would basically be central planning by the government in DC.
RATM (profile) wrote on Sat, 6/13/2009 - 11:22 am replyIgnore userWouldn't that destroy the muni market for all states?
California is broke. People will have to more accurately price risk
Ding, ding , ding. Winner. Unfortunately as long as the rules of the game get changed on a regular basis this won't happen.
Short selling restrictions
Freddie and Fannie debt guarantees
Money market guarantees
etc, etc, etc...
Risk capital will not return to the markets until the rules become clear - at this time they are anything but..
Pavel
you are an incurable romantic who believes in history: "I thought that concept of the Union had been settled for some time."
I'm not the complete optimist:
The Storm is Coming:
pavel.libsyn.com
Albt, I agree that constitutions should be hard, but not impossible to change, on of the reasons the US one has worked out pretty well all things considered. They are supposed to prevent the passions of the moment from changing the structure of the law. The idea that 50.1% of the vote can change the constituon is pretty silly. Not totally against being able to do so by pop referendum, but to change the constitution a supermajority should be needed, something like ti has to pass by 65% or something.
Why would the current political system allow for a new state Constitution? They will lose.
California is like a low-IQ trust fund brat. Estimates are CA spends ~ $13B on illegal immigration ever yyear. Of course this estimate includes both anchor babies and illegals. Primarily the health care costs, and education costs. That's why the people were smart enough to pass Prop 187 years ago. Except the politicians vacated the Prop 187 fight, because those politicians happened to disagree that illegals were a problem. Just think; 3 years of not paying $13B (which is a conservative number) is $39B; and that means the state would theorhetically be running like a $15B surplus. That's not to say it's not a problem.
The problem is immigration policy lately always comes down to "states can't do it, only feds" and none of the Federal government has done this for like 10-15 years! This has shifted the financial burden to the states without any recourse! And its not even like Bush pretended he cared about enforcing immigration law . Hey, we have laws for a reason, but I guess we'll only enforce the little bs like speeding, parking tickets, and other nickel and dime crimes; while we won't do anything about illegal employers; who offload their health-care burden onto the taxpayers.... yeah that $6/hour gardener is probably costing a lot more than $6 if you factor in all the taxes you have to pay. Oh but let's fear monger about $10/lettuce...
I think we have an IQ problem...
. It also assumes that with unfettered taxing power the budget can be balanced. The State just raised the sales tax. Result? Lower revenues
Yes, i expected that.
It's going to be true in general for most of the States and the Feds.
Laffer curve is pretty much at the peak point, only downward play in both directions.
Sixty years of Pavlov conditioning is mighty hard to break, though.
What concerns me is that we may be headed into a season of difficulties which will call for unity and cooperation, not division.
rb (profile) wrote on Sat, 6/13/2009 - 9:24 am
* reply
* Ignore user
Sure. Walking from a house has become more of a business decision than a stigma.
more than the level of price decline it is borrower behavior that will determine what the value of these securities are. It seems to me (since I have seen much commentary on this) that policy makers are still expecting people to maintain their past behavior with regard to making the monthly mortgage payment. Having set the precedent that it is ok to stiff lenders in favor of unions I don't know how one can criticize somebody who decides to walk away from their mortgage . If people who could pay but are unwilling to pay start defaulting things could get a whole lot worse.
Like with any mass disobedience movement if enough do it there will be little stigma and even fewer consequences. Are landlords really going to be able to be fussy about renting to somebody who has defaulted? There wouldn't be anybody to rent to!
YSLP, is that $13 B a gross number or a net number? After all illegals do pay some taxes
we may be headed into a season of difficulties which will call for unity and cooperation, not division.
It's important to differentiate (yuk yuk) between what we hope for and what we expect.
LL,
I find that they can be asked for. I have yet to be able to find if they are being asked for. Any tips on what/where to look?
Walkaway wise S. Fla is already there.
If they banks offered the mods a year ago that they are offering now, the mentality
would have not got established and princes would have dropped less and
more slowly.
It's too late now.
Only thing that will work is really big cramdowns.
When it is hard to lease because of bad credit, relatives who have good credit
sign the lease. Edited to add not.
Dirk van Dijk (profile) wrote on Sat, 6/13/2009 - 8:36 am
YSLP, is that $13 B a gross number or a net number? After all illegals do pay some taxes
That's a pulled out of ass # that the know nothings like to use.
If people who could pay but are unwilling to pay start defaulting things could get a whole lot worse.
Six Flags Seeks Chapter 11 Bankruptcy Protection
The amusement park company Six Flags is seeking Chapter 11 bankruptcy protection, saying it needs to reorganize and shed $1.8 billion of debt....
Six Flags says it actually had a great year in 2008. It saw 25 million visitors and posted record revenues. But executives are trying to lighten a $2.4 billion debt load that they say is unsustainable.
I think most people would be profitable if they could get rid of 75% of their debt load.
"If people who could pay but are unwilling to pay start defaulting things could get a whole lot worse."
There is the home owner's nightmare of a line of plywood-covered windows down the street. There can be different levels of resentment.
Are you a title theory or lien theory state? That is, do you have foreclosure by posting or do
you have to file a lawsuit.
If you have to file a lawsuit, a deficiency judgment can be asked for in the lawsuit. Don't know
how you would find that in a database, either here or there. I know 'cause I have a ringside
seat, and would have personally observed it or heard the gossip.
Don't know what they do in a title theory state. I guess they'd have to file a lawsuit, which
makes it even less likely.
I think the stigma of foreclosure has been greatly diminished and it will diminish even more over the next two years.
Agree absolutely, Coinz.
LL,
Illinois is lien theory. So, once they go to foreclosure, they've already filed a suit, and there's less reason not to go ahead and ask for difeiciency judgement?
Daniel Snyder, not Mozilo, is the embodiment of what a pair of brass balls and leverage will do for you.
@Pavel,
Just wanted to comment on your "all for one" romanticism -- keep it up, it inspires me.
Ca has lost its majority middle class. and has become a democratic system of class warfare, with the lower classes, in the majority, voting to confiscate the wealth ot the upper classes. As is so often the case, Ca is leading the nation on this one. Welcome to the future with a minority middle class.
all for one isn't going to happen in our identity politics world.
everybody complains about illegals but nobody is shy of taking advantage of the lower prices that illegals make possible.
We should stop picking on illegals who are only trying to what all us try i.e. earn a living and take care of their families. It is the employers and their customers who are villains.Make employers who hire illegals serve some jail time. If the jobs are not there illegal immigration will decrease automatically.
Agreed bobn, but here they don't. You have to adduce proof of the value lost. Then
you have to squeeze the money out of the proverbial stone. People who supinely
let you foreclose would prolly fight this. Can you imagine?
You made me a loan I couldn't possibly pay back and now you want the difference that
you knew I couldn't pay. And besides there was fraud on your side.
In Fla the court system is semi collapsed right now. If they added deficiency hearings--
which would take far longer than the 5 minute motion calendar that most foreclosures
are relegated to, it would enter total collapse, right now and I'm not kidding.
Unless Charlie Crist uses that incredible bump up in foreclosure filing fees to
enlarge the court system, which I've haven't heard one way or t'other.
Sure haven't heard much out of the Fair Taxers lately, have we?
Housing prices won't stop falling until we get positive net on jobs. The high-end 1 million plus can keep on falling for years after the lower end bottoms.
Anybody got a feel for how many illegals have left/not come?
Cubans, I assure you, almost never go back to Cuba and
stay.
Dirk,
$13B is gross; $9B is net. This is from FAIR. Of course there is a disincentive for people pro-illegal to present the proper accounting. Arnold admitted a number $5-6B; so it is not at all unreasonable to expect the true number is $9B. Again, FAIR also includes anchor babies effect, this might account for $3B as well.
Report is here. It is a 2004 report. No one has done anything better.
Comrade Alexi Mahalovich... If you disagree with the number I challenge you to read and respond to the report.
Also I haven't seen this LA Times exercise linked at all. You try balancing the California budget.
It's fun! Play around with it and you'll understand why so many have reasons to block any cut.
Rob Dwg
"Eliminating the 2/3rds req makes the entire Republican delegation irrelevant."
No, it is the other way around. The granting of a virtual veto power to a nearly homogenous and increasingly extreme politica party that barely polls 1/3 in the legislature is against the grain of democracy and it entrenches an irresponsible party leadership that keeps the party irrelevant, except for its special veto power.
Eliminate the veto power by eliminating the 2/3 requirement and the repub party in California will have to compete for relevance . . . just like parties in democracies are supposed to do.
It is the employers and their customers who are villains.Make employers who hire illegals serve some jail time.
This has the added benefit of being potentially enforceable. After all, if you deport a hundred illegals, there seems to be a ready pool to take their place.
"if the Calimorons had even taken a few baby steps to try to save themselves, I would be sympathic."
......I still wouldn't be sympathetic. I was born and raised there, invested a TON of money & time, have family, ties, and friends still there, and the legislature has never grown up and learned anything resembling fiscal responsibility in 30-years. The morons work in Sacramento.
The granting of a virtual veto power to a nearly homogenous and increasingly extreme politica party that barely polls 1/3 in the legislature is against the grain of democracy
Apparently you woke up in a different country than I did.
Good baromoter for the ecnomy is rush hour traffic
Rush hour traffic in San Francisco is getting really thin.
If we had morons in sacramento it would be an improvement.
"Cubans, I assure you, almost never go back to Cuba and stay."
......the 90-mile swim is a bitch with a backpack........
I completely agree with the sentiment that its an employer problem as well. We have no problem shredding up the Constitution vis-a-vis "terrorism"; we can make a few adjustments to how we use Social Security numbers and "no match" on the e-verify program to essential make this problem go away. Simple; if you employ someone who is a "no match" social security number, than you have 30 days to correct it, if that person is not fired; you are in jail. But for some reason Social Security has been exempted from any of these new fangled Patriot Act invasion of privacy BS we've had since 9/11. We make e-verify mandatory with IRS penalties.
The politicians have no interest in solving our problems... this has been evident since I've been to CA and had a huge wake-up call on what "illegal immigration" really is. Of course on the flip side I believe we do need a reasonable guest farming program (bracera?) but we already have one in place... just one look at the fields of Oxnard and Ventura counties... how come white people aren't doing that backbreaking work?
From the distant past, Feb 6, California outraged over credit default risk being rated higher than that of Brazil...
California Budget Crisis Spurs Trading in Credit-Default Swaps - Bloomberg.com
16 weeks is a long time in credit default riskland.
C
"if the Calimorons had even taken a few baby steps to try to save themselves, I would be sympathic."
Yep, we're idiots. It hardly matters whether we're one party or two. But California's fall isn't going to be pretty. It's not like the rest of the states are models of fiscal restraint and good governance. Wait until you get the flood of emigrants.
Wait until you get the flood of emigrants.
so true.
my office lease in rancho cordova expires in march of 2010.
COME ON MARCH!!!!
Is anybody gonna pay off on those swaps???
Hahahahahaha.
Comrade Coinz (homepage, profile) wrote on Sat, 6/13/2009 - 11:47 am
@Pavel,
Just wanted to comment on your "all for one" romanticism -- keep it up, it inspires me."
Thanks Comrade Coinz.
It may even be the way of survival.
Come on down to fabulous Florida.
We have lots of vacant condo units. But you'll have to pay cash for
them, unless they are under the fha limit.
And you better check to see if everybody else is paying maintenance!!
Forgot, I heard some gossip yesterday that vacation condo sellers are giving
the weeks away free, so long as one paid maintenance?
lawyerliz,
A friend of mine was telling me about someone she knows in Florida that has stopped paying the mortgage on two condos that they rent out and they are going into foreclosure. They haven't told the tenants and are just pocketing the rent for as long as they can ride it out (something about needing the money to make payments on a BMW). Both my friend and I think its a pretty scummy thing to do but my guess its pretty common. Any laws in Florida that help the tenants. Only thing I could think of was maybe there are notification requirements where the owner must tell tenant about foreclosure proceedings. Or maybe there's a clause in some leases that provide for this, though I doubt it.
NYT: AIG Balks at Claims from US Airways Plane Ditch on Hudson
Teaser: For the first couple of days after his flight ditched into the Hudson River, Paul Jorgenson was just glad to be alive. But then he started to need his laptop, his wallet, his car keys — all the essentials he had stowed under his seat and left behind in the sinking plane. A pleasant woman at US Airways told him not to worry; he would be made whole for his losses. But then the matter shifted to US Airways’ insurer, the American International Group, operating under government stewardship since its bailout last fall.
16 weeks is a very very long time in credit default riskland if you consider even the week to 5 June figures from DTCC - unless my comma analysis has shorted out, $15T notional of CDS written, on 2m contracts.
DTCC » Consent
That's quite a lot.
C
lawyerliz,
So are if you don't give your secretary a raise are you willing to accept a lower-standard for her lower-wages? Is there some type of deal where you can give her less hours at a "raise" and she can work part-time elsewhere? Or is she someone who is supplementing a spouse, living within their means and is just providing herself with some "wallet money".
@ YLSP
Sorry about not being able to pay your claim but we spent it all on bonuses.
Any wonder A.I.G. is removing logos from its' headquarters, badges, etc...
Pitchfork and torches time.
teabagger,
lots of cheap office space here in Pahoenix.
Cheap houses, lots of retired folks.
Once again we shall be a retirement mecca!
Actually we should just advertise Phoenix as SuperEast LA!!
Actually once things stabilize in 2010, this place will start a long climb up.
First we have to find a bottom.
Thanks for all of the knife catchers who have bought property- you have cushioned the fall and propped up America's banks and pension funds!!!
On the other hand, spent yesterday cleaning up a very nice lot of steel stamps for use in silversmithing and metalwork that I purchased for $25.
Amazing what steel wool and elbow grease can do on surface rust.
Now, all we need is a lot more cheap housing- which will be on the way soon.
The really funny thing is that government is the only growth industry, and only the federal government too boot.
Two retirement lunches in the next two weeks, and a lot more to come! The boomers are getting while the getting is good!
Someday this war's gonna end...
@ Citizen
Government, at any level, can NEVER be a growth industry as they produce nothing.
@ Citizen
Nice work on the steel stamps.
If I was on that AIG flight I would've taken the $5k from US Airs straight to a law-firm. I know there is some sentiment that lawyers suck. But let me just say, not if you are paying them. From my experience the lawyers I have hired have been worth the hourly fees.
Wait until you get the flood of emigrants.
Been happening for a long time.
My entire family left between 1986-1990.
YSLP, I do not think the guest worker program is useful. First of all the government sets the wage (Obama administration just announced they are going that route). Guess how that will go with time. The Unions will take over the program if it is run by the government.
The next problem is that growers have to hire workers ahead of time. In many crops you do not know exactly how much labor you will need or when you will need it. If fruit comes in early or late or heavy or light there is limited flexibility with a program that requires you to hire months ahead. Is the government going to allow you to cut hours of the employees while you wait for work for them? Another down side is that growers have to arrange housing. That will not be esy in a NIMBY state.
From the workers perspective they would rather have the power to move from grower to grower looking for the best opportunity. If they are treated badly they can leave. If they are not making much per hour they can leave. Remember, that harvesters are often paid piece rate. They can make $1,000 a week if there is a good crop. Many harvesters move up the coast from grower to grower following the peak of the crop.
The solution is simply an ID card that workers can present to a grower in lieu of a SSN.
Citizen allen
i've been thinking of phoenix. my oldest son starts at ASU in august. I think i can get most of the employess to come along and the remainder can telecommute.
HomeGnome,
gonna start making copper bracelets for boomers with arthritis.
Just about the only growth industry around here. I still have to get my lazy butt moving and sell a bunch of stuff on ebay before things really head south. We will most likely shut down state government here in Zonie land at the beginning of July for a couple of days, and that will give me the time.
Someday this war's gonna end...
It's a wonderful AIG:
"I don't have your money. Your money's in Goldman's bank, and Morgan's bank, and Buffett's, and..."
w,
I was referring to the farmworkers program that is already in place. There's already a legal guestworker program; I think it's working.
I pass the fields every morning and see the workers there... to me they look like modern day slaves, bent over picking strawberries all day long... of course it is their choice to come here and work in the fields to stay here. I just have no idea how someone gets that job. Some days I want to go there at 6AM and see what they do. It looks grueling, and I think using some type of solar powered robots might be a solution at some point... not sure how you can get them to delicately identify and pick crops... but it would be nice use of stimulus money... oh wait we used that to prop up old industries.
Another 36%? That sounds pretty dramatic
Well. it is not dramatic if you think about it. If unemployment keep rising another 3% and internest on mortagegs go up as well, I can see it happening.
What's odd about this article is that unlike most media coverage it makes clear that the AIG policy doesn't cover all incidents but only covers losses caused by the negligence of the airline, so it's quite possible that there is not a valid claim against the insurance, but still AIG is perceived to be acting unreasonably and "playing hardball" because they aren't going to pay until their legal obligations are clarified.
Why do people think insurance companies are bottomless sinkholes of capital there for the taking every time something bad happens, whether the insurer actually covered the incident or not?
I for one am glad that the company isn't giving away taxpayer money by immediately paying every claim that comes in the door.
OT ALERT:
My wife and I took 15 LARGE squash and a whole bunch of green beans to one of the local mens'/ womens' shelter this morning.
Totally organic and GnomeGrown.
They had better tell the tenants. A good many tenants will leave when they are notified
of the foreclosure proceeding. Some few will stop paying. The landlord can evict them
and put someone else in there.
We discussed this several weeks ago. The banks could ask for a receiver to be
appointed, but they never do. Then the tenants could pay the receiver, but that
might earn them no brownie points when the foreclosure was over. Unless they got
something in writing.
The tenants could find out who the lender is and then start to pay the rent to
the lender. They'd still get evicted & the lender might return the money!
Rent skimming as it is called in Cali is illegal here, but you have to do it on more than
1? more than 2? units and you have to prove guilty intent. I n Fla,
Henh, henh, the tenants could go to court by themselves and ask for a receiver and
to pay the money to the receiver. Never heard of anybody doing that, but they are
a defendant, and have standing. Don't know if there is any benefit but revenge.
GOOD MAN, HomeGnome! - We're not far behind.....
teabagger,
get all of your stuff started and move over.
You won't see your son except on sundays when he shows up to do laundry.
Let 'em telecommute and 1099 'em.
Taxes here are very small in comparison to the "Golden State"
Worker's comp, unemployment taxes (well they are going up soon), state income taxes- all half of California or less.
Rent for now though- buying is for suckers. Locate your office or house close to the airport for easy access to LA and the rest of the west.
The funny part is the local folks think they need incentives for large manufacturers to show up.
har.
Small business is far more profitable.
Someday this war's gonna end....
"Only thing I could think of was maybe there are notification requirements where the owner must tell tenant about foreclosure proceedings."
Slick Dog, LawyerLiz can give you a more informed answer than I can, but I can relate my experience as a tenant in a Florida condo in foreclosure. I was named in the action, and served, as "Tenant in Possession". I knew the foreclosure process had been initiated before the landlord did.
Yalt,
I'm leaving the thread: but doesn't one have a reasonable expectation the plane is not going to land on the Hudson? Does this mean if the plane had crashed and everyone died they wouldn't have a claim either? That damn bird; flying without insurance! It's all that bird's fault.
Hi to Lily, the most gorgeous cat in the world, and her human, Terry.
@ BSR
I'm just a soldier in the non-violent revolution.
"You must be the change you wish to see in the world"
---Ghandi
When there's insurance, people that this crazy idea it must cover something. If I bought plane insurance, I'd have this wild idea it would cover a plane crash.
But wait, how silly of me!
YSLP,
Do you really think that even one of those workers is here legally?
There is a lame government attempt at a guest worker program but it is totally useless. Like I said, the government is determining the pay rate, and you have to arrange labor months ahead of when you need it. The workers have no flexibility to follow the work from grower to grower. Very very very very few growers use this program.
Heh, heh.... Lily sez, "Meow, Liz!"
Where are we now? (from the Baseline Scenario):
"Financial markets have stabilized – largely because people believe that the government will not allow Citigroup to fail. We have effectively nationalized any banking system losses, but we’ll let bank executives enjoy the full benefits of the upside. How much shareholders participate remains to be seen; there will be no effective reining in of insider compensation"
"More broadly, there is sophisticated window dressing in the pipeline but no real reform on any issue central to (a) how the banking system operates, or (b) more broadly, how hubris in finance led us into this crisis. The financial sector lobbies appear stronger than ever. The administration ducked the early fights that set the tone (credit cards, bankruptcy, even cap and trade); it’s hard to see them making much progress on anything – with the possible exception of healthcare"
"The consensus from conventional macroeconomics is that there can’t be significant inflation with unemployment so high, and the Fed will not tighten before late 2010. The financial markets beg to differ – presumably worrying, in part, about easy credit leading to dollar depreciation, higher import prices, and potential commodity price inflation worldwide. In all recent showdowns with standard macro models recently, the markets’ view of reality has prevailed. My advice: pay close attention to oil prices"
The Fed-Banker complex is slowly grinding this country to dust.
Fed-Banker-Government Complex = FASCISM
Yeah I'm not that sympathetic to claims beyond out-of-pocket losses, actually. No, there is no strict liability for airlines, evidently. Not sure if there is a no-fault type payout for crashes.
Ok, I missed something, what are the plane people making claims for?
AIG still had $1600 billion exposure in financial "insurance", the last time CEO LIddy testified. The fireworks begin when he tries to extort another round. What's to stop Tim from funneling the returned TARP money back to the big banks through AIG?
Back on topic for a second. Lots of those underwater types are still paying. Any Idea of how far
underwate they are? More underwater, more walkies-walkies?
One woman in the article is trying to get AIG to pay for 'counseling to stave off PTSD'.... she could be genuine but this is the typical kind of scam people run when they think they can get some $$$.....
Maybe that's where the 134.5 b was going!!!
Some people still have some values... personal integrity...
Pay the money directly to the shrink!
Doesnt the insurance company normally negotiate a settlement with the injured party and pay them a single amount and the recipient signs away all liability....
"The depression is contained to California "
Escape from LA? Where are Kurt Russell and James Cameron?
@ Blackhalo
More like Falling Down.
D-fens.
"What's to stop Tim from funneling the returned TARP money back to the big banks through AIG?"
The government of Italy?
That's why we do No-Fault in NY for car accidents. No damages for pain and suffering, or emotional distress, unless you meet a threshold for "serious injury".
Staving off P-T Stress Disorder sounds iffy..
I would hate to see CA try to write a new constitution.... also if anything happens to Prop 13 there will be a lot of older people forced to sell because they wont be able to pay higher property taxes... That could add a lot onto the price slide of houses.... It's the legislature's job to come up with a balanced budget, and the state is already way overtaxed... Wait - just tax that rich guy over there - the one who is making $32k/yr... he is way richer than all those poor people that we have to help....
lawyerliz wrote:
Back on topic for a second. Lots of those underwater types are still paying. Any Idea of how far
underwate they are? More underwater, more walkies-walkies?
I know people who can pay but are not paying to try to force a mod. I also know people who are underwater, but continue to pay as agreed.
My unsubstantiated guess is that most people who can pay will continue to pay until they can't due to job loss or major illness, etc.
We are still paying, in spite of being 25% underwater on the mortgage- after having put 20% down.
We are in the process of asking Sh*tibank for a mod- we have found out they still own our paper too,
so one would think they would just give us the 2% rate reduction we have asked for.
But not yet.
I still may just hand the place back to them and say eat it.
They keep pushing refi, also, which would abrogate my ability to "Walk Away" due to nonrecourse.
So we push for mod, and keep paying. Although my wife is finally getting fed up about it.
Since she desires to keep the place, the mod is the only thing that makes sense.
Given the magnitude of the potential loss, the bank should be modding at lightspeed to keep us happy.
Someday this war's gonna end...
Is there an update to to Italy story? Bberg said probably fakes. $500 million face value from 1934, no such thing as Kennedy bond. Very interesting if some counterfeiter thought he could fence them for 10% or less, expecting little scrutiny if the bubble pops.
liz,
Thank you. As always, you are a wealth of information. I'd also looked around in CR's achieves on this and found a very good piece by Tanta from last August. You were active on the comment thread that day. Here's the link in case anyone is interested its very good:
Calculated Risk: Why We Have a Foreclosure Crisis in the First Place
From CBS back in Nov 2008.
In addition to an investment of $20 billion in Citigroup, the government plan also guarantees up to $306 billion in risky loans. This is on top of the $25 billion the government has already pumped into Citigroup.
sorry, Allen M, don't think Citi cares one wit about you.
@citizen allenm,
If you don't mind sharing, how did you approach them to ask for a mod? Did your circumstances change?
"Baby Born On NYC Mass-Transit For Second Straight Day"
.....what did they do? Push the baby back in to be delivered the second time tomorrow? Perfect example of idiots writing headlines. Do they think "spellcheck" assists in this problem too?
Yesterday Bond Girl pointed me to an article - bearer bonds have been illegal since 1982 - These are fake, who knows what the motivation was.... might not actually be any crime committed...
I'm leaving the thread: but doesn't one have a reasonable expectation the plane is not going to land on the Hudson? Does this mean if the plane had crashed and everyone died they wouldn't have a claim either?
I'd have to see a copy of the policy itself to say, but if the description in the NYT is accurate, no. Insurance policies cover what's in the contract, not every possible event of which there's a "reasonable expectation" that it won't happen.
Liability policies cover the airline's liability due to a lawsuit brought by another party against the airline due to some sort of negligence or malfeasance by the airline. No negligence, no fault, no lawsuit, no covered claim. AIG's not paying anybody until suits are filed against the airline. When they are, they may or may not (depending on the contract language and the facts of the case) cover the airline's defense against the suit. Nothing's going from AIG to the passengers until those lawsuits are settled.
Standard liability policies require a "negligent act" as a condition for coverage. The precise language varies--sometimes it's possible to get the language softened because firms are worried that they'll be left without coverage against frivolous lawsuits regarding events for which they're not at fault. But softer language means a higher premium--assuming it's available in the marketplace at all. And even if the policy doesn't explicitly require "negligence" it at least require some legal liablity on the part of the airline.
The way I see it, either
Or, more likely, a combination of all three. I seriously doubt that there's any aviation liability policy available that would cut checks to passengers immediately after a crash before any legal actions have even commenced, much less been settled. This isn't homeowners insurance; it just doesn't work that way. That the airline was apparently telling passengers everything would be covered makes me think they're getting some really terrible advice, either from their attorneys or their insurance agents or both.
"The morons work in Sacramento."
And who put them there on promises of tax free benefits? As essential services get cut, what is the incentive to pay taxes?
Wouldn't be hard to write a break for seniors into the law. Of course, if they're living in more house than they need or can afford...
If essential services are cut, I would expect that people would stay home to defend their property instead of going to work too... Could get pretty ugly, particularly in the inner cities...
Terry-
Wow. That's awful I'm sorry to hear that. I'm sure you can find somewhere else but its got to be very aggrevating.
"bearer bonds have been illegal since 1982"
From what I have seen, only for Americans. And 1982 sure would be been a good time to get hold of some 30 years... Internationally they are very popular for moving vast sums of money around, with minimal paperwork. Plus, who knows what the other hand was up to with things like Iran-Contra, No-bid Haliburton contracts and other Black-ops stuff.
"might not actually be any crime committed..."
I will wager that Secret Service/Treasury will have a very different view.
Terry's been living there rent free for a while though, but he might have to move on very short notice - like 10 minutes...
In California, where disaster walks, can Glodmans be far behind?
Firm urged hedge against state bonds it helped sell - Los Angeles Times
Or even, in front?
C
@ Blackhalo
Seems someone put a banana in our tailpipe.
Re Goldman bonds and swaps - if CA could get their spending under control they wouldnt need to borrow money in the first place and this would all be moot... It's the spending that's the problem, at every level of govt... Govt interference in the marketplace distorts everything with the inevitable consequences...
Blackhalo: ...Plus, who knows what the other hand was up to with things like Iran-Contra, No-bid Haliburton contracts and other Black-ops stuff....
I'm with you on this one.
But as weird as the bond story is, mix in "guns for indirected cash" for some illicit third party, or some other shenanigans, and it gets rapidly weirder.
And to boot, The Sting inverts the meaning of it all.
And I always thought it WAS the token clerk's duty to be nasty...
"The New York Court of Appeals recently held that the common carrier liability rule--a century-old legal theory that imposes absolute liability on common carriers for their employees' misconduct--is no longer viable in that state. (Adams v. New York City Transit Authority, No. 95, 1996 WL 220767 (N.Y. May 2, 1996).)
The case arose from an alleged assault on Margaret Adams at a New York City subway The New York City Subway is a rapid transit system owned by the City of New York and leased to the New York City Transit Authority , an affiliate of the Metropolitan Transportation Authority and also known as MTA New York City Transit.
...
Adams sued the Transit Authority, claiming that a token booth clerk verbally and physically attacked her after she asked the clerk for directions.
Finding the common carrier rule "no longer viable as a matter of law or policy," the New York high court concluded "that the token booth clerk's assaultive conduct, which was indisputably outside the scope of her employment, does not give rise to vicarious liability on the part of her employer." "
"Wouldn't be hard to write a break for seniors into the law."
....we did.......it was called Prop. 13
I see that most every viewpoint on California's politics and economy has already been posted.
I thought it was interesting that I agree with Rob Dawg that California's problems are structural in nature since the odds are pretty good that he and I would not agree on the solutions or even the details of the problem.
But I am looking forward to 2010 redistricting having an impact on the impasse in Sacramento.
Proposition 11, passed in November 2008 by a whopping 50.8% of the vote, changes the authority for establishing Assembly, Senate, and Board of Equalization district boundaries from elected representatives to 14 member commission and provides guidelines.
Since the conservative area in which I live has been gerrymandered to provide multiple Republicans with some votes each, there is in effect no one representing my area. That will likely change after 2010.
Why should the legislative districts be any different than the city and county areas?
ShadowInventory (profile) wrote on Sat, 6/13/2009 - 9:53 am
I would hate to see CA try to write a new constitution.... also if anything happens to Prop 13 there will be a lot of older people forced to sell because they wont be able to pay higher property taxes... That could add a lot onto the price slide of houses.... It's the legislature's job to come up with a balanced budget, and the state is already way overtaxed... Wait - just tax that rich guy over there - the one who is making $32k/yr... he is way richer than all those poor people that we have to help....
It won't just be older people, it'll be everyone. Businesses would be so disadvantaged that those that don't leave will die. They aren't going to triple property taxes on people like me because that would crush our property values and defeat the purpose and while that won't put those of us with substantial equity underwater it will push all the rest into default thus defeating the intent.
I cannot stress this too much; California is in trouble because its taxes are too high and its spending too high and its services to taxpayers too low. Higher taxes and/or lower services are not going to help at all.
YLSP (profile) wrote on Sat, 6/13/2009 - 8:55 am
Dirk,
$13B is gross; $9B is net. This is from FAIR. Of course there is a disincentive for people pro-illegal to present the proper accounting. Arnold admitted a number $5-6B; so it is not at all unreasonable to expect the true number is $9B. Again, FAIR also includes anchor babies effect, this might account for $3B as well.
Report is here. It is a 2004 report. No one has done anything better.
Comrade Alexi Mahalovich... If you disagree with the number I challenge you to read and respond to the report.
FAIR upfront admits they have an axe to grind, but they don't know how to use their grindstone.
Am I supposed to believe that somehow net expenses of illegal immigrants in a decade rose from $1bn to $8.8bn, while the illegal population (according to FAIR) doubled? Reading through their (lack of rigid) methodology, calling it a "pull it of their ass number" is being quite generous.
Fitch is fuckin* right and on the same page that I'm reading and only retards would be betting on recovery!
Fixed mortgage rates typically track the yield on the 10-year treasury note. "The 30-year mortgage tends to have roughly the same [sensitivity to interest-rate changes] as a 10-year treasury," says T.J. Marta, a fixed-income strategist at RBC Capital Markets. Historically, the typical difference between mortgage rates and the 10-year treasury yield—known as the spread—has been roughly 1½ percentage points. In the mortgage industry, the difference between these two rates is often referred to as a "risk premium."
30 year fixed mortgage rates are currently about 5.67%, thus how will this impact refinancing if in 6 months mortgage rates are closer to 6.53. I would suggest BAC growth will slow significantly, as will home sales.
BAC 1/21/09
Price $6.68
EPS 0.554
P/E 12.06
E/P 8.29%
10 year Treasury 2.526%
BAC Overvalued by 5.77%
BAC 6/13/09
Price $13.72
EPS 0.85
P/E 16.10
E/P 6.19%
10 year Treasury 3.778%
BAC overvalued by 2.412%
Amen and good afternoon
Also see: YouTube - Baba O'Riley
"Since the conservative area in which I live has been gerrymandered to provide multiple Republicans with some votes each, there is in effect no one representing my area. That will likely change after 2010."
I wish Texas had something similar. In and effort to give W more friendlies in the house, Perry had a mid decade redistricting that split Austin five ways, with districts stretching from the coast to Austin and Austin to the border.
From the article linked by C, on GS telling clients to bet against CA bonds they underwrote :
"Some experts said the investment bank's actions, while not illegal, might be inappropriate. "That's not a good way to do business," said Geoffrey M. Heal, professor of public policy and business responsibility at Columbia University. "They've got a conflict of interest and they're acting against the interest of their customers. . . . You act in the interests of your clients. You don't screw them, to put it bluntly.""
Other experts would want to know more about the representations GS made to CA in collecting their millions in fees, before they dismiss illegality.
Check the outstanding level of commercial paper as well - down YoY ~30% - down in April and May on a monthly basis.
"Why should the legislative districts be any different than the city and county areas? "
Because they're based on population.
Cautious about recovery:
BBC NEWS | Business | Big economies 'stabilising' - G8
Elephants and Asses
Trampling the Masses
Wake up.
The answers to our problems won't come from government/ politicians.
"These are fake, who knows what the motivation was.... might not actually be any crime committed..."
Unless the crime is to represent them as valid.
@ energyecon
I thought one of the Fed alphabet programs was largely taking the place of CP at the moment. Is comparison to last year really apples-apples?
coinz's baseline scenario
You might find this crazy but I think the feds will orchestrate a DOWNTURN in the markets in the next few months. Not that they want to but it will be the lesser of evils. A flight to safety will mean stronger $US which will cause oil to go down and treasuries up (yields down - so Ben can take his vacation) as investors flee equities. Lower mortgages and oil will help the average citizen more than any 'confidence' gained from a rising stock market (and does it really mean anything to the bottom 80% of wage earners? Do they actually own much?)
The banks have already raised a lot of additional capital in this run up which is what I think was one of the main purposes of the 'green shoots' campaign. I have no doubt they can push the markets higher - much higher, but it would much easier to do a replay of the first half of '09. A 5000 point roundtrip which would earn those in the know cough Wall Street cough a whole lotta coin.
I think of it as the feds pumping the brakes. Inflate a bit then let some air out then repeat the process as much needed
Re: Bonds
Well, there was a Treasury Secretary named Kennedy under Nixon. Perhaps that is why these are being called "Kennedy Bonds"? I don't know how many bonds were issued under him however; nor who bought them. I doubt it was $134B to Japan...
Blackhalo, the Texas redistricting was a pathetic display of tyranny IMO.
California redistricting OTOH has always been about trading safe districts, something the pols love.
I dont think I worded that well. .... I should have said why should legislative districts span city or county boundaries? Perhaps all the legislators should be elected at large by the entire state.... and we could have a lot less of them... That might not be any better though - fewer people to bribe by the lobbyists... Common sense just isnt all that common....
And another friggn thing, as we can see with The Fed data, MZM may have peaked, in terms of people saving cash, but IMHO, that may be a factor related to inflation, i.e, people are saving less cash, because they are spending more in this jobless recovery. Thus, as Treasury yields recover and Treasury prices decline, that will encourage savings and also increase mortgage rates, during a time when historical inventories are being dumped, thus Fitch is spot on, it will take at least 2 years to burn off inventory -- but if mortgage rates increase, that will slow demand for home purchases, as will a lack of jobs and increased inflation. We have at least 3 to 4 years before we see any daylight and the great risk, is that foreclosures are increasing, adding to inventory! There is a foreclosure filed every 13 seconds! Take that to the bank, and then ask BAC and other banks how they will increase EPS!
"Adams sued the Transit Authority, claiming that a token booth clerk verbally and physically attacked her after she asked the clerk for directions."
Those are locked and armored booths, no? The clerk would have had to exit the booth deliberately. There's a story here.
"Terry's been living there rent free for a while though, but he might have to move on very short notice - like 10 minutes... "
I might get fifteen....
In reality, I just need to pay attention to when the foreclosure sale is put on the calendar. That will give me four to six weeks notice.
Yes, it's been rent free since last summer.
Stop paying for a month or 2 Allen and you may get your wish.
"Why should the legislative districts be any different than the city and county areas? "
Because they're based on population.
Well, actually, he has a good point. Political subdivisions should remain intact wherever possible. Carving up population centers into fingers pointing in different directions is done for one purpose only and it's not a good one.
Umm think it was more of a guarantee - injected enough soma to close the 30 day spread - but at the peak CP was what, like $2 T?
You know we are making progress when sportsfan and I agree on something...
"Carving up population centers into fingers pointing in different directions is done for one purpose only and it's not a good one."
Reducing the effect of the will of the people? Yeah, pretty foul.
Also I haven't seen this LA Times exercise linked at all. You try balancing the California budget. It's fun! Play around with it and you'll understand why so many have reasons to block any cut.
That's interesting but they needed some different options. Even with all the spending cuts presented you'd end up with a $840+ million gap. There needed to be a "default on union government employee contracts, renegotiate"
Actually, Shadow, what I thought you were saying was that the integrity of local political boundaries (e.g., cities and counties) should be respected wherever possible when districts are created.
And in closing, as many will recall:
If the current level of credit support was considered insufficient to cover projected losses, the security was written down to fair value with a corresponding “other than temporary impairment” charge, in accordance with accounting guidelines, equal to the difference between book and market value.
How in The F are banks going to recover in this jobless recovery? If banks do not have earnings and have to resort to accounting fraud sponsored by The Fed, SEC, DOJ, FBI and Congress, then how does one value fraudulent assets in terms of overvalued real estate loans and adjustments to reserves that are not realistic or legal?
This is all about perception and conning people into thinking they can start using credit cards again and MEW!
Re: Consumer Confidence Up
The Bonddad Blog
Worryingly, the report's gauges of inflation expectations rose to their highest in months, creating concern for the Federal Reserve, which has pumped money into the financial system to spur recovery from the worst recession in decades.
For the third month now the overall consumer sentiment reading was at its highest since the Lehman debacle last September, which caused severe strains in financial markets, while not breaking through that month's level of 70.3.
"There needed to be a "default on union government employee contracts, renegotiate""
AKA BK. Why should labor contracts be subordinate to any other debt? I see and odd chapter in Cali's future. One that involves a judge.
I'll google and report back.
Cali IE home sales prices previously around $250/sf are now frequently below $100/sf, many at $75, some at $50/sf. At some even lower price, continuing to pay homeowners premiums based on their estimate of "replacement costs" of $200/sf, and continuing to pay Riverside RE taxes based on 1.25% +/- of 2005-06 purchase prices of $250-$350/sf, looks like an idea whose time has passed.
sportsfan - most every viewpoint on California's politics and economics has been covered? Why, no, sir.
We still have PIRATES! Being a failed state, California may still rise to fulfil its potential as the Somalifornia on the Pacific...
From Journal of Commerce, "Navy Warns Pirates Changing Tactics":
Navy Warns Pirates Changing Tactics | Journal of Commerce
C
When there's insurance, people that this crazy idea it must cover something. If I bought plane insurance, I'd have this wild idea it would cover a plane crash.
But wait, how silly of me!
You're a lawyer; you know better than this.
The passengers on the plane didn't buy "plane insurance". They didn't buy any insurance at all and have no standing under the AIG policy; all they did was contract with the airline to get taken from A to B. The only claims they might have are against the airline resulting from (a) tortious wrongdoing on the part of the airline or (b) failure of the airline to carry out their part of the contract.
The insurance policy is a contract between AIG and the airline to cover (a) above. If the airline decides, as they probably should from a public relations standpoint, to give some compensation to the passengers outside their responsibilities under tort law, that's not AIG's problem.
Any contractual liability probably isn't AIG's problem either, as it's ordinarily explicitly excluded from liability policies. Simply put, your contracts are between you and your customer and don't automatically put your insurance company on the hook for your losses under contracts to which they aren't even a party.
To be honest, the way things worked out the whole AIG policy is something of a red herring. Unless somebody on board was carrying billions in treasury bonds in their briefcase I doubt that all the out of pocket expenses of all the passengers put together wouldn't come anywhere close to the policy deductible.
Let's see--$134.5 billion in TARP money left over, $134.5 billion in bonds seized in Italy, US Treasury Secretary Tim Geithner attending the G8 meeting June 12 and 13 in Italy. Hmmm.
Well, Wyoming gets a US Senator for every 6 people, I want to at least make sure I get per capita representation somewhere. Obviously, there having been only a couple of black senators in the history of the United States despite about 13% percent of the population being black, the system needs tinkering. In a parliamentary system there is wider representation of minority groups. The party in power always looks to redistrict, subject to occasional judicial oversight.
We still have PIRATES! Being a failed state, California may still rise to fulfil its potential as the Somalifornia on the Pacific...
Actually, we could just hijack all the containers coming through the ports of L.A. and Long Beach. Good idea!
"Let's see--$134.5 billion in TARP money left over, $134.5 billion in bonds seized in Italy, US Treasury Secretary Tim Geithner attending the G8 meeting June 12 and 13 in Italy. Hmmm. "
If you have not seen Frontline's 10 Trillion and Counting, and Black Money, I would HIGHLY recommend them.
Actually I shouldn't have posted that. Thought that AIG was refusing to pay the cost of the
plane. Maybe it is. . .
I think the rules for lost property are governed by Federal Law to a large extent, but the airline is a bailee of your luggage, and would under common law be responsible for its value regardless of negligence.
A senator for every 6 people? I know Wyo's a little on the sparsely populated side, but that's downright lonesome.
like the banking bailout politicians are doing what their master tell them. How many of those wonderful gated communities in CA and FL would survive without illegals to do the house and yard work? What about all those two income families that depend on illegals to the child care. As I said like the banking bailout it makes more sense to stick the general tax payer with the bill while arguing for a tax cut for the wealthy.
As a progressive I am strong advocate for States Right. While it might not matter much in the very large states (CA, Fl, TX and NY) the remainder of us will be much better of with power and revenues being returned to the States. Living in Vermont I am quite certain that our individual voices can compete with the special interests. The Federal government is no longer a protector of individual rights- gay marriage is a case in point. I think we need to realize that this is not the 50s.
For a quarter century the Feds have been decanting far more from the State than they've returned
In the double-dip '81-'83 recessions there developed in CA an "association of disassociating counties" hoping to stop sending up more money to the state than was perceived to coming back. Maybe an association of disassociating states is the way to save CA and other states and end the federal train robbery.
California is not so much over taxed or under taxed, but mostly badly taxed.
Prop 13 is a disaster because property taxes are more stable than income and sales taxes. Sales taxes are the worst, most regressive and most volatile.
Meanwhile, big corps just got a $2 Billion tax break this February, 2009, in the middle of the budget blow out. Oil and gas extraction pays no tax......
California is not in the top ten states for total taxation of its residents. Yes, higher income tax and sales tax, but lower property tax.
Ending Prop 13 need not throw old people out of their homes. Normal states give property tax breaks to seniors on fixed income. California could do the same.
The recovery is a forest. People have let their credit cards go, and don"t have mortgage payments it looks as if we are spending more and people have disposable incomes again. Actually, savings are getting drained and there are no new jobs. We are in the calm before the storm. People are spending what every little cash they have left on eating out and shopping for smaller ticket items. This will come to an end in 6 months. There are no new jobs. Can you hear the quiet in America?
hat tip to Econ & Finance Articles Updated Daily for providing good finance and economics articles
California is not so much over taxed or under taxed, but mostly badly taxed.
Just for the record, Californians are very highly taxed in aggregate:
The Tax Foundation - California's State and Local Tax Burden, 1977-2008
The notion that we can easily absorb loads more taxes is, in my opinion, silly.
Cheers,
prat