Here are some conclusions that I take away from this lack of action on CIT today:
Bair is secure in her position at the FDIC - likely with strong supporters in Congress and the White House.
Comparatively, Geithner is less so at Treasury.
Bair probably is itching to wrap up the FDIC wrap on bonds. It is outside the FDIC's chief mission of many decades and as such has an uncertain risk profile.
Bernanke probably does not want to participate in one offs anymore.
All future bailouts must meet a much higher political threshold and most likely have to be initiated and supported entirely by Treasury.
For the foreseeable future, I suspect we will not see any more newly invented Fed facilities.
Portentous porcine pushed off the precipice previous post: nova (homepage, profile) wrote on Wed, 7/15/2009 - 5:35 pm
from the ny link
...Cities can try to borrow the amount they are losing, and the agreement calls for the state to repay them over three years, but many of the weaker localities may face the prospect of defaulting on their bonds.
That's the money Oxnard was using to finance their leaseback arrangement for their own city streets. Ruh roh.
barfly (profile) wrote (in reply to...) on Wed, 7/15/2009 - 5:41 pm
[impending California budget agreement] Well done, RD. What's next?
The Cities are an unpredictable bunch. I expect the gas tax diversion is going to be their target of opportunity.
Budget magicians use sleight of hand to help close California's giant deficit
Expenses still too high? Here's a really creative one: Push back state employees' monthly paychecks in June 2010 by a single day — from June 30 to July 1 — and thus onto the next fiscal year's books. Just like that, $1.2 billion "saved."
Mr. Beach: Bair is secure in her position at the FDIC - likely with strong supporters in Congress and the White House.
I disagree. I think Geithner, right now, is more secure. The Administration had no options left for CIT, and it couldn't force the FRB or FDIC to play ball because of the agencies' independence. Damn, Congress actually did something right...
I can't wait to hear the screaming from the cities when the details are rolled out.
It may not just be the weaker cities that are in danger of defaulting on their bonds when the state grabs more of their tax income.
'Expenses still too high? Here's a really creative one: Push back state employees' monthly paychecks in June 2010 by a single day — from June 30 to July 1 — and thus onto the next fiscal year's books. Just like that, $1.2 billion "saved."'
The farmer figured he'd cut back the horse's feed by just a few wisps of hay and a few ounces of oats every day, and the animal wouldn't even miss it. At the end of the year he expected to save a lot, but the darn horse died before New Year.
Push back state employees' monthly paychecks in June 2010 by a single day — from June 30 to July 1 — and thus onto the next fiscal year's books. Just like that, $1.2 billion "saved."
So push from June 30 to July 20 and $24 billion saved?
Mission accomplished.
California's extremely progressive income tax has a nasty impact in a declining wage economy. Thus the latest trial balloon out of the bureaucracy: Commission considers flat tax for California» Ventura County Star
The commission’s staff analysis concludes that the 6 percent flat tax would increase the share of state income taxes paid by 93 percent of tax filers (those with taxable incomes of less than $100,000), slightly decrease the share paid by the 5 percent of tax filers with incomes between $100,000 and $200,000 and dramatically decrease the share paid by the 2 percent of filers with incomes of more than $200,000.
The share paid by that top category would drop from nearly 40 percent to less than 30 percent. The share paid by those with incomes between $20,000 and $50,000 would nearly triple, from about 5 percent to about 15 percent.
Your thoughts? Will this work, or will we be reading about another crisis in 3-4 months. As I recall, the February deal was supposed to have resolved the budget mess.
Basel Too: I think FDIC's open reluctance to support CIT and Bair's dismissal of PPIP earlier suggest that she is confident in her position. Politically, big Wall St bailouts have not played well on main st. Bair has openly supported foreclosure mitigation from the start and that has won her supporters in Congress.
Since Obama cherishes strong debate, I suspect Bair also has support at the White House.
you folks realize that 2.5 billion to CIT, and the hundreds of billions to FRE/FNM/GS via AIG could have more than filled all the budget issues of all fifty states, right?
"you folks realize that 2.5 billion to CIT, and the hundreds of billions to FRE/FNM/GS via AIG could have more than filled all the budget issues of all fifty states, right?"
It happened - in an alternate universe to which access is denied.
Repair California, the organization working toward placing a ballot measure on the 2010 ballot asking voters to convene the state’s first constitutional convention in more than a century, announced Wednesday it will conduct a town hall forum. The event will be held Aug. 3 on the campus of California Lutheran University.
The Thousand Oaks forum will be one of eight such events that will take place across the state between next week and the end of August. The initiative sponsors will weigh public comments as they draft the proposed initiative, which they intend to submit to state elections officials in late September.
Today's budget agreement is not going to work. Too many special interests feel they are being singled out. Gutting UC like that was probably a strategic mistake.
"in an alternate universe to which access is denied. "
yes, an alternate universe where we don't spend trillions on overseas wars of choice and one GS broker's livelihood isn't worth 10,000 schoolteacher jobs in federal priorities.
Just about got pigged in the other thread; I'm a little slow with the one-handed typing while my 3-week old sleeps in my other arm...
Rob Dawg (homepage, profile) wrote on Wed, 7/15/2009 - 6:37 pm
reply ignore user
Obama doesn't "hate" small business. He has no idea what they are and what they do. His background just has no exposure to their issues.
On this point I'd disagree. Obama knows small business. His neighborhood in Chicago (Hyde Park) is one of the very few that is dominated by small, independent businesses. It's wealthy enough to have a stable economy but black enough that the national chains stay away. Even the grocery store is a local co-op where the residents buy ownership shares to shop there.
Magic Johnson made billions investing in these areas around the country. If anyone in America really knows small businesses, a black family with disposable income is it. There must be some other reason for the lack of a bailout for CIT.
Are you a bull now? I was feeling more optimistic until I visited downtown Saratoga Springs today. On a gorgeous summer day at the height of the tourist season most of the boutiques lining Broadway had the feel of masoleums. Deserted. The restaurants looked OK, but the retailers were obviously hurting. A couple of shopkeepers I spoke with said they haven't seen the the tourist spike yet. If things don;t pick up, these guys will be dead by the end of summer. Just my personal observations.
"Ross said while a flat tax might reduce volatility, it would also depress growth in state revenues, which would lock in today’s budget problems indefinitely."
Welcome to the future of America. Cali may be first but watch most other states start similar cutbacks.
Details emerging from the talks suggested that the deal will require extraordinarily deep cuts to school systems and local governments ( hey they can become more like Texas that ranks 37th in education ) and while far smaller than the governor threatened a month ago, substantial cuts to health care and other social services ( yikes ! )
I think we've hit bottom, yes.
The mental impact of The Crash peaked sometime around March.
I was playing around with graphing of "Roubini" and "Krugman", etc.
Many of the graphs show a peak in March so I think the mental impact and reaction to The Crash peaked and has passed.
Does any politician have expose to anything besides law school, campaigning, and the odd MBA? Our biggest mistake was instituting yet round legislatures that require full time politicians.
Lots of families that two bread winners in state gov so those furloughs are a huge hit. A large portion of my my friends work in gov, healthcare, or education. Most bought their homes in 98 and 00 and thought they would always be safe because of the equity cushion. Now even those with 100k household incomes who were previously the first to whip out the credit cards for everything are now suggesting going to the Crocker on the free admission days and eating a picnic lunch in the park instead of going to to the 33rd st bistro 6 times a month.
The capitol needed these late boomers and early X Genners to keep spending their little hearts out to break even so if gov workers have less disposable income, everybody gets to share the pain.
I've been tracking the rate of change of total listed jobs on Dice.com.
That number looks like it's bottomed out, too.
Today, right now, it's at 48.8K and it's been in that range for a couple of months.
I recorded 51.2K in March, which seems to be a pivotal month.
I think the financial sector bloodletting has peaked and the worst is behind us; trillions in federal backstops have guaranteed that. I think the long, slow grinding recession in the real economy still has a way to go. All the real economy indicators (rail traffic, port traffic, retail sales, etc) still look very weak.
The poor and needy in California get screwed again. Just an example of what the rest of the country will experience.
"The difference between liberals and conservatives is that liberals want a better life for everyone and conservatives want a better life for themselves."
See what a little distraction like Michael Jackson overdosing did to the media. Distracted them from reporting on the economy for two weeks, consumer confidence goes up and the recession is now over.
I disagree that it needs to be a surprise, at least not to CR readers.
I'm okay with that.
But the housing crash is now into its fourth year. If you study previous depressions going back the past 150 years, they're surprisingly range-bound, usually 3-5 years. Even the Great Depression bottomed in the fourth year.
I don't like the idea of a flat tax at the national level, but I think it works well at the state level when the state also has a balanced budget requirement. I think it limits the growth in the boom years so things aren't crashing down as hard in the bust. My own state of Illinois demonstrates that you can still get into major trouble with a flat tax, but when the governor proposes to raise the tax to fix the deficit you get huge amounts of pushback from all sides, unlike Maryland which easily passed a huge tax increase on millionaires only to discover that half of them disappeared leaving them in worse shape than before. I think you come to the realization that you have to cut spending sooner rather than later. For this reason, I think it would be good for California to adopt a 6% flat tax.
"The difference between liberals and conservatives is that liberals want a better life for everyone and conservatives want a better life for themselves."
Bullshit. Liberals are just as selfish, just with other people's money. The biggest beneficiaries of programs for the poor are the middle and upper middle class professionals that administer these programs. I am no conservative, but I know graft when I see it. To quote a sixteenth century monk: "The poor are a gold mine."
HollywoodHack (homepage, profile) wrote on Thu, 7/16/2009 - 12:57 am
you folks realize that 2.5 billion to CIT, and the hundreds of billions to FRE/FNM/GS via AIG could have more than filled all the budget issues of all fifty states, right?
broward (homepage, profile) wrote on Wed, 7/15/2009 - 6:20 pm
But the housing crash is now into its fourth year. If you study previous depressions going back the past 150 years, they're surprisingly range-bound, usually 3-5 years. Even the Great Depression bottomed in the fourth year.
Huh? Jun '06 does indeed put us into the 4th year but if instead you use the NBER Dec '07 we are only in month 19.
Not One Cent (homepage, profile) wrote (in reply to...) on Wed, 7/15/2009 - 6:22 pm
HollywoodHack (homepage, profile) wrote on Thu, 7/16/2009 - 12:57 am
you folks realize that 2.5 billion to CIT, and the hundreds of billions to FRE/FNM/GS via AIG could have more than filled all the budget issues of all fifty states, right?
Yes very good point but does not fit with Obama's objective with his Wall St bought and paid for economic team to pump up great chunks of the Big Shitpile that's essentially worthless unless the peak real estate values of the bubble can be miraculously restored.
Give your money to Bonnie or to Clyde. Either way, they divy up at the hideout.
Well, I have actually started thinking about shifting jobs, so one could think that the d/rec/pression is lifting a bit. A bottom we have, for at least a while.
That inflation number provides the impetus. Zero chance of any increase in pay where I sit- move or fossilize.
"The biggest beneficiaries of programs for the poor are the middle and upper middle class professionals that administer these programs. I am no conservative, but I know graft when I see it."
I am having a hard time understanding how 1.5 billion from about half the California budget, education, adds up to a deal to close a 20+billion dollar hole. The entire story looks and smells like bullshit.
no dawg, I agree with Broward, Great Recession is 22 months of age in the month of our lord timespace contin-ue-uhhhhmm..
august naught 7 was the credit crisis kickoff party. which pitched a softball to mr great recession who smashed a double crash off the right center field fence. Benny had to pull off the stick save. Timmay cant close. Sheila is knocked out.
Zeks. I remember the term from Gulag Archipelago. As for the monk, as I recall he was German, I don't remember the name.
Broward:
I don't think there will be a new panic. I just think, like the Great Depression, this contraction will grind on for years. It only seems different this time because 1) we time compress the Great Depression and 2) we have an entire segment of the MSM (CNBC et al) dedicated to pushing good news.
Look how quickly the MSM mood changes. Two weeks ago, when the payroll number came back much worse than expected, the green shoots turned to weeds. Same thing last week when the retail sales reports showed worse YOY comps. This week, based on strong earnings from Intel, the recession is over. I think the truth is in the middle. Over the past month, a lot of indicators (consumer confidence, restaurant performance index, architectural billings, etc) have stagnated. Like I said, a long, slow grinding process.
the thing about it is the long unwinding hasnt started in a lot of places so if they want to call recovery they will, can,and have to.
but im still decreasing needs and putting wants on a list. planing for the worse hoping for the best.
None of these are predictions:
A large country unable to sell it's bonds would be a surprise.
A bankruptcy by a seemingly secure company (not GM, etc) would be a surprise.
A major battlefield LOSS in iraq/afghanistan would be a surprise.
bANK fAILURE (profile) wrote on Wed, 7/15/2009 - 6:34 pm
no dawg, I agree with Broward, Great Recession is 22 months of age in the month of our lord timespace contin-ue-uhhhhmm..
Yeah I agree (I threw out 19 NBER) but broward was pushing for Oct '05 for 40+ months.
Coincidentally I called the bubble popping Oct 6th, 2005 shortly after breakfast when my biweekly housekeeper announced in her best broken English that she had bought a house for 3x what mine cost. Bubbles popping are not great recessions. That took a lot longer to gain traction.
Somebody taking down the internet, that wouldn't be a surprise (there's lots of talk of it's vulnerabilities), but if it actually happened, it would be a shock.
Again, not a prediction.
I think the correction happened fast, the economy needed to contract by about 10% when the housing bubble burst. Businesses have stabilized for the most part outside of CRE and the last group that needs to adjust are governments. For the first time in decades they need to get their balance sheets in order resulting in higher taxes, smaller government and a cram down.
I don't think Iraq or Afghanistan matter, economically.
Failure to float bonds could be a big upset but i'm not sure why would it happen now.
I think at worst we see a gradual increase in interest rates which keeps the economy zombiefied.
I don't use the Oct 2005 number because nobody recognizes it but the homebuilder crash in Mar 2006 was exceptional.
So Arnie's going to put kids on waiting lists for health care? That'll save money until the kid with no doctor gets put in an ICU for an asthma attack that could have been prevented by a six dollar inhaler.
Things don't get worse, as long as you aren't the one being ground down. Things didn't get worse between 1933-1937, but the misery remained elevated throughout that period. I think lots of people here may share your opinion that we've bottomed. I think most believe a return to robust growth is very, very unlikely for the next few years.
"..........to close the state’s $26 billion budget gap .........The deal also required the use of accounting devices used by all states in a time of crisis, like putting off programs or payments until the next fiscal year so the budget gap does not seem as large. Local governments.......will probably lose far more ..... when the state begins dipping into tax streams on which they depend, including gas taxes." (Emphasis added)
.....I thought it was $26-billion MONTHS ago, and the budget gap is not solved - just ignored until next year (see emphasis added) - kind of like our "immaculate recovery". Smoke, mirrors, and the squint of the bad eye makes it all better. I call Bullshit - otra vez.
Sorry if some other old grumpy guy already has commented on this. I just got up from my cat nap on the wrong side of the cat box.
Launch of an Iranian nuke.
Fatal and fast moving flu beginning this fall.
I think it is a given that tax receipts at all government levels will continue to fall, and that at some point the Chinese, Japanese, and sheikhs say, 'No mas.'
I think that happens as early as this fall.
Shorter days and longer nights beginning in the fall make for panicked reactions by hoi polloi and their overlords on Wall Street, who merely are more aggressive and less inhibited.
Agree with squidward. Once a semblance of calm returns, the yield hunt has to continue, and the system is still both tightly coupled and unstable. The surprises, such as they may be, are most likely to be of most impact in good ol fashioned bond vigilantism and currency speculation. It won't take much for a momentum player to find something potentially wobbly, give it a push or two to test, and then short the sh!t out of it. Political crisis, health, or a major accident could help things along.
If it starts to look like carrion, someone's gonna make it so.
Okay, I'll bite; what kind of woman would want to have 'relations' with an unemployed guy with an old car? Are you cruising the bad part of Philadelphia or something?
Don't worry Goldman Sachs is working on the next asset bubble, probably be water or some agricultural commodity, unless the cap and trade gets passed, then carbon.
Swine flu is having impact in UK, recent deaths were a child and a GP...
"The number of people diagnosed with swine flu soared almost sixfold during the course of last week in some parts of England, NHS figures revealed today.
The virus is spreading fast across much of the country and the total of those affected rose by 42% in the seven days up to last Sunday, according to data provided by family doctors.
Information collected by the Royal College of General Practitioners' research and surveillance centre in Birmingham, which monitors communicable and respiratory disease, shows that the rate of people diagnosed with influenza-like illness in the north of England leapt from 6.6 per 100,000 of population during 29 June to 6 July to 37.2 per 100,000 between 6 and 16 July."
The panic ended in March. I have always thought we would muddle through, for a while, until the baby boomer retirment numbers lifted off. At that point, a funding crisis for the US government seems all but inevitable to me.
people rioting for health care? Flu Shots?
Hunh? Who's gonna riot for health care? Too abstract. When you need it, you're in no position to "riot."
.
Nobody with the flu will riot. Nobody without the flu will riot for shots.
I have always thought we would muddle through, for a while, until the baby boomer retirment numbers lifted off. At that point, a funding crisis for the US government seems all but inevitable to me.
Yes.
That's my point about the Feds manage cash flow and ignoring balance sheet. As long as they can maintain cash flow running through the economy, they can maintain some level of order. Once the balance sheets come into question, though, that's a big issue.
I'm in IT, stuck in consulting now for five years.
It's just too dishonest and flakey, it's all about netting large piles of money and delivering some perfunctory crap.
I tried to get out in 2006 but once you're typecast....
I had peak panic in March. Had to unplug for a couple of weeks. Couldn't figure out how the big save was going to happen. Guess I hadn't read enough of Krugie and Ben on the miracle of the pump and printer.
How naive I was.
(Course I don't think global public debt is sustainable, but that's for another day)
broward - unsolicited advice - you should be in marketing.
Much of your commentary is on what's hot and what's not. And you can quantify it. That's marketing, not IT.
Gee most posters just yucking it up as the future of America looks more and more like a much BIGGER version of Argentina or Mexico .
Once again highly recommended you read full article because 'CaliTex' is setting the new tone per above and with worst of both
California v Texas America's future Premium content | Economist.com
I am standing outside the county health clinic. My daughter and son are with me. Their friend died yesterday of the flu. The county person comes out and says"We are out of flu shots for today."
The county person comes out and says"We are out of flu shots for today."
And you do what?
.
But if no "county person" comes out, instead a sign is posted, "We are out of shots today" you do what?
.
Suppose it's not a "county person" but a nurse. You do what?
Has anyone else suggested a bigger and better Madoff as a triggering event?
<
p>
My two-cent prediction: CIT will go BK, with enough high-profile consequences that Corus and others will get bailed with not-too-many complaints. CIT will play same role as Lehman did.
counterpointer: i remember March, quite humorous in retrospect. every fricking day, Joe Shmoe promising that Geithner would nationalize Citi and BAC by reading his wrinkles and eyebrows. Glad I went long BAC at 4...
Sorry, folks, but I don't buy that this mess has even bottomed. As Doug Noland has stated (and I'm totally paraphrasing), all those Federal backstops are alleviating current crises in favor of creating the "mother of all crises" down the road.
We need to start an age poll with your feelings on the economy...My take of my family and friends: People my age are scared. But this is unknown for us. Boomers, for the most, 70s revisited. Our golden members, feels like 1930... Be interested how this view holds up out and about the country...
A reference representing the people who believe that the Gernan scientists did NOT fail on purpose: Jeremy Bernstein, THE FARM HALL TRANSCRIPTS. Some background may be found on wikipedia under "Operation Epsilon".
@TJ and The Bear (profile) wrote on Wed, 7/15/2009 - 7:09 pm
Sorry, folks, but I don't buy that this mess has even bottomed. As Doug Noland has stated (and I'm totally paraphrasing), all those Federal backstops are alleviating current crises in favor of creating the "mother of all crises" down the road.
Yup that's what politicians do...kick the can down the road....Bush did a great job of doing this from 2000 - 2008 but Obama has NOT figured out that there's not much road left to kick the can down before the "mother of all crises" hits !
Barney Frank, GOP Go After Credit Rating Agency Dominance
An unusual alliance could see that governmental gift rescinded. Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, says that a GOP plan to confront the credit rating agencies is something he can get behind.
The GOP has proposed ending the requirement that lenders use three specific agencies to rate financial products. With the requirement to use the agencies repealed, banks could elect not to have an instrument rated by one of the big three agencies. There are market pressures, of course, that would encourage the use of rating agencies, but under the reformed law, new agencies would be entitled to enter the marketplace. The free market, rather than a government mandate, would determine whether banks use rating agencies -- and which ones they use.
TJ - I don't buy that it's bottomed either, but right about now is different from last Sept/Oct, and March. The discussion started on whether peak panic had subsided.
"I have always thought we would muddle through, for a while, until the baby boomer retirement numbers lifted off."
"How about people rioting for health care? Flu Shots?"
......I would imagine you have many more BBs staying in the workforce now and competing with their kids and grandkids for those scarce jobs instead of saying "screw it and bailing" like I did.
People can't get up off the couch to riot for anything IMPORTANT - much less for some unknown healthcare propgram that will end up costing twice the total anticipated and be less than a third the program hyped. I might also suggest they start with the percentage of the 46-million first that WANT healthcare insurance before subjecting the entire population to the new program.
Basel Too
"counterpointer: i remember March, quite humorous in retrospect. every fricking day, Joe Shmoe promising that Geithner would nationalize Citi and BAC by reading his wrinkles and eyebrows. Glad I went long BAC at 4..."
im a war baby reminds me of the late 60s early 70s with boomers demanding change without nothing to replace with.
squid
thank you jpmorgan got bs and wamu
forgot all about wachovia
SEC Chair Seeks Transparency of Credit-Rating Agencies
By AUSTIN KILGORE
July 14, 2009 4:02 PM CST
Advertisements
The Securities and Exchange Commission (SEC) chair Mary Schapiro is seeking authority to mandate enhanced measures to promote the transparency and integrity of the nation’s statistical ratings firms, including the limitation of ratings shopping, according to testimony delivered Tuesday to a House Financial Services subcommittee.
Ratings agencies have faced criticism for over-rating mortgage-backed and other asset-backed securities created by their clients but that were comprised of assets that turned out to be toxic. Since the subprime mortgage fallout, critics have called for regulation of the firms.
Basel BAC at 3 and Citi at 1 had noting to do with whether they were being nationalized it was about what people thought was the true value of the equity.
so, BG, we assume that the budget impasse isn't solved, and this grinds on another month - at what rate are you a buyer of GO bonds? how does your answer differ if a FTB taxpayer or not?
I'm not a chartist or wavist or Fibbonacian or whatever flavor TA is pushing this week but I find it incredible to think we won't revisit the March lows in the markets.
Yeah, panic level anxiety is a real energy drain. But yeah I am more ready. I just don't have enough ammo and you wouldn't believe how long it took me to get 4 claymore mines.
Yes, we haven't seen the bottom of the markets yet, just like we haven't seen "peak panic" yet. For us regular Californians, the term is "foreshocks". For HollywoodHack types, it's "foreshadowing".
Even the grocery store is a local co-op where the residents buy ownership shares to shop there.
Not any more--it went bankrupt a couple of years ago. I was a member; so was Obama if memory serves. It's now been replaced by a chain store, but it's a small Chicago chain (Treasure Island).
But I agree with your general point. It's not just Hyde Park; all the south side communities where he worked and organized are dominated by small businesses if there are any businesses at all. You can't do community work there without meeting and working with a whole lot of small businessmen.
@TJ and The Bear (profile) wrote on Wed, 7/15/2009 - 7:24 pm
Yes, we haven't seen the bottom of the markets yet, just like we haven't seen "peak panic" yet. For us regular Californians, the term is "foreshocks". For HollywoodHack types, it's "foreshadowing"
and for others its just 'foreplay' until the final act of getting f*cked
Delaying payments by a day is an accounting gimmick.
It's pretty common practice in business, though, no?
If Wall Street gets excited by it, they've got a lot of companies to be excited about, then
Looks like they'll be puttin' the squeeze on the Ratings Agencies just like they did FASBy ...
Prior to becoming SEC Chairman, she was CEO of the Financial Industry Regulatory Authority (FINRA) — the largest non-governmental regulator for all securities firms doing business with the U.S. public ~ Chairman Schapiro ...
California looks like it will have a budget, but schnookers the accountants by $11B.
Calpers announces that they are suing the ratings agencies for their inability to properly rate financial instruments.
The conclusion is obvious: The ratings agencies will overlook the $11B in return for dropping the lawsuit.
There. Do I have to solve anything else tonight?
EDIT: As I think about it, the timing of the announcement by Calpers is rather coincidental. You don't think that was the plan, do you?
From the Mercury News piece:
"Democrats then unveiled their own set of one-time maneuvers. They include a new 3 percent tax withholding for payments to independent contractors, good for $2 billion."
I predict a land rush at the Department of Corporations. Every independent contractor will need to incorporate fast.
That lawsuit is hilarious. I highly recommend reading the text of the complaint.
Most of those gimmicks are pretty common; it's the magnitude that is shocking. But the immaculate recovery will make sure this does not blow up on them, I'm sure.
From JP's excellent Merc article
"Democrats plan to force a floor vote on their budget plan sometime this week, even though Republicans have already declared the proposal dead on arrival since it includes new taxes — on tobacco, oil production and vehicle registrations."
.
Is it groundhog day?
Increase taxpayers" paycheck withholdings by 10 percent and accelerate estimated tax payments by individuals and corporations. The proposals don"t change how much anyone owes, but they allow the state to grab more tax revenue earlier in the fiscal year. Impact: $2.3 billion
Impose a 3 percent tax withholding for payments to independent contractors. Impact: $2 billion
Delay the June 2010 state payroll by a single day, from June 30 to July 1, thereby moving that payment into a different fiscal year. Impact: $1.2 billion
Sell a portion of the State Compensation Insurance Fund. Impact: $1 billion. (The independent Legislative Analyst"s Office called it "very unlikely" that the state would be able to pull off such a sale by next June.)
Shifting money from various accounts, such as gas taxes that are normally earmarked for transportation improvements, to boost the general operating fund. Impact: $2.5 billion
Source: Gov. Arnold Schwarzenegger, Democratic legislators
There are people who prep and then there are people who want to get really ready. Home Depot is a good start but I found a National Guard Armory that has a better selection of tools...
Unfortunately, California doesn't permit all my favorite toys. As soon as I can acquire a "get-away" farm like BSRs I may have to change principal residences just to stock up.
"Wouldn't this simply result in an increase of 3% for the price quoted?"
It would be easier for the I/Cs to just form an LLC. No 1099, no withholding.
Business owners are already going to pissed at having to set up for a new withholding scheme, so they will probably insist that their contractors incorporate.
They include a new 3 percent tax withholding for payments to independent contractors, good for $2 billion.
Wouldn't this simply result in an increase of 3% for the price quoted?
Back during TEOTWAWKI time I took enough cash out of the bank to last a few weeks in case TSHTF. My wife ended up using the money making a killing on very high-end bathroom and kitchen fixtures at 80% off on Craigslist. People were really dumping great quality things back then.
Little guys will discount and take only cash, no receipts and pay zero taxes. Customers who have little money will be willing to take the chance. State can't catch them as they will be hamstrung in the cost to recover is not there. Government always shoot at sitting targets. The honest ones.
poic - I am SO going to remind you of that at some time in the future.
The world was about to end, it was late, so we bought fixtures...
C
"
Well she IS Chinese. The Chinese view on the end of the world type events is never miss the opportunity to save a bunch of cash. Of course if it really was the end I would have had to figure out some way to connect a generator to my bike to power the fridge she also got the great deal on at the same time (:
Whatever it is, it will be something out of left field...
US commission seeks China Xinjiang sanctions
By Shaun Tandon – 1 hour ago
WASHINGTON — The US government commission on religious freedom called for targeted sanctions against China over the ethnic unrest in the predominantly Muslim region of Xinjiang.
The US Commission on International Religious Freedom said it was "gravely concerned" about China's "repression" of the cultural and religious traditions of the Uighurs, the ethnic group native to the vast, arid Xinjiang region. AFP: US commission seeks China Xinjiang sanctions
China blasts Turkish boycott call
Wednesday, 15 July 2009 06:57
China on Wednesday blasted a Turkish call for a boycott of Chinese goods as "irresponsible," a day after it angrily denounced accusations from Turkey that it was guilty of genocide China blasts Turkish boycott call | TurkishNY.com
China Warns Residents In Algiers Of Terror Threat
The Chinese embassy in Algiers issued a warning to the 50,000 Chinese, who live and work in Algeria to be on alert and to take safety precautions, in response to a report that the al-Qaeda terrorist organization may target the area, reported BBC.
An al-Qaeda-linked group said that it would avenge the deaths of Muslim Uighurs that occurred during the riots in China’s Xinjiang province, reported Bloomberg. ToTheCenter - News: China Warns Residence In Algiers Of Terror Threat
Everything you could want in a place, except they're still in California. I think I'd still want at least a little hideaway in NV (or Northern AZ) just to "store" a few things.
As a policy wonk, I am conflicted about a constitutional convention. I am worried that it will drift off into partisan issues which have nothing to do with the budget, like gay marriage, global warming, right to work/union rules, or spaying or neutering your pet. There could also be goodness knows what commercial interest trying to do whatever about litigation rules, biotech, or drivers licenses for illegal aliens.
Still, it would be nice sequestering all state elected officials, requiring a bread and water diet, and suspending their pay if the budget is late. If it's more than 30 days late, there could be a lottery each day where several randomly chosen elected officials are prohibited from running for any office for 5 years. Oh and lobbyists can only communicate in writing to public officials if the budget is late, and all correspondence becomes public record.
OK so can someone show me how I can adjust my CA withholding now? I was thinking updating my DE-4 form; but now I will have to adjust for this 10% more in with-holding. Seriously how is that going to "fix the budget problem"? Is that on the spending side or the revenue side? Or the faux-revenue side?
The U.S. was intended to have a CC every 50 years or so, but you can tell how that's worked out. I just don't know how it could help but be gridlock central.
What ever happened to Ross Perot? Maybe he's a little old to try to save CA with some well-financed ballot measures.
Steve Forbes with a flat tax? No he lives in NY.
Parker & Stone? No, they are in Colorado. They'd turn this into some kind of joke.
What's Steve Westley up to? He sounds like the kind of rich optimistic guy with experience in State government to run a convention! I met him at a conference a few months ago. He'd have us all in fast electric cars soon too.
Between the well, solar power system, barbed wire fence, driveway to the top of the lot (37 acres with 300' elevation; peak at 5,900 feet; backs up to the Prescott National Forest), modest manufactured home ($75K), septic system, I'll be in at $275K. More than I thought ($200K), but prettier and more enjoyable than I thought, too.
But, it will be safe, defensible, and will support farming and ranching. And, the hunting will be great.
Ok; I figured out why this site is slow; whenever I post there is some hit to "google analytics". What the eff is that? I'm not in a good mood with this "hey we fixed the budget by magic tricks..." but I can't stay to chat much since my son is done with his bath and I need to give him some attention. I have no idea why my posts are causing my browser to hit "google analytics.com" or something like that but its some BS and I've noticed it before...
Buiter "It only concerns who pays, and there the answer is clear: you and I as tax payers or you and I as mandated providers of subsidies in large assigned-risk pools."
through our taxes means to government ... risk pools means single payer ...
With sincere respect for you I will believe in an upturn when you buy back in and are employed. Until then I think you are playing with the omniscient meme tracker.
What is impressive here is the big news today being a $75 billion company going bad and Ca using accounting tricks to cover the stench of insolvency. Sleight of hand is not generally perceived as real magic and making billions and billions disappear and reappear in a different column changes nothing.
Using the market as an indicator of economic health for our country is like living in Phoenix in August with your AC blasting and looking outside at 2pm and thinking it might be a good time to go for a jog.
I will agree the world has faced financial calamity time and again. Once again I'm staking my impression of worse to come on the environment, water and food supplies, oil dependence and much posturing bordering on active engagement between several nuclear armed regimes.
Looking back at WWI and the run up to the world wide depression was the tranquility of 40 years of peace with London playing the center of the financial world. The widely accepted thesis was war was such an economic disaster for the world that the prolonged prosperity made maintaining the status quo a guarantee against war. Look up Norman Angell, "Europe's Optical Illusion", for this thesis that made the rounds among the elites of the time. Politicians espoused the ideas and over 40 organizations were created to spread the word. Somehow all that marketing failed with a single shot paving the way for two wars and the transition of the Brits to the US as the world power.
I do not believe any major shift from West to East can be accomplished without some catastrophic struggles.
Starting in tax year 2009, anyone paying quarterly estimated taxes to CA was expected/required to pay 30%/30%/20%/20% by quarter rather than 25% each quarter. Failing to do so will result in a penalty.
Based on current revenue flow, looks like not many got the message.
TJ, if you are trying to be economical (I was), just don't pick something at high elevation or with a big increase in elevation. My well is going to cost me $35-50K, probably, between the drilling, pumping equipment, and solar power source. The damned driveway to the top is $11K.
But, I will have a beautiful field of view of any and all bad guys coming my way.
Should be few, as the lot is at the end of two miles of paved road followed by eight miles of unpaved road.
Great place to hideout. Won't be so great for my teenage daughter and teenage son, though!
Yes, they will be unhappy, initially, as will be my wife.
But, as we are listening in on the mayhem in La Jolla via shortwave, as the Mexican druglords and San Diego gangs run amok after the San Diego police department quits showing up after getting 'paid' via IOUs, they will all get over it.
From where I sit, (New Mexico) those plots of land look pretty, but VERY expensive. I met one of the "Good Old Boys" who had been selling land in southern Colorado for years. He bought large plots, subdivided, and sold on terms. His purchase rule was the price of the land had to be less than one third of the net present value of the note he sold it on, discounted to yield 18%.
There are lots of dead subdivisions all over the southwest with owners scattered around the world. Tax records may let you track them down to find a real deal.
Winter is when you have a big truck and a snow plow.
I lived outside of Flagstaff, on a dirt road, for 7 yrs. The only way out in the winter was with the plow. We hauled water and used wood for heat. Not a bad life, but it was allot of work.
Maine was too far for a quick, easy exit when hell breaks loose in SoCal. Beautiful country, but we'd have to abandon ship at the first whiff of unrest, to make it across country with the last of our belongings.
My wife wants to keep things normal -- kids in school, etc. -- as long as possible.
The Northern Arizona 'Doomstead' is only 450 miles away, an easy seven/eight hour drive. So, I'll be able to get it up and running until Armageddon arrives, then -- ideally/theoretically -- bug out at the last minute.
Yeah, that was my very next question. What I'd like to do and what I can do (at the moment) are two very different things, too, so I'm in no real rush.
TJ, if you have that skillset, you could probably build a nice log cabin, instead of buying a ready-built home, install your fence, build your driveway and septic system, etc.
You guys are all crazy - if you are going 'native' and are looking at farms - focus on productivity not beauty. My father took the train from Minneapolis to Seattle then down to San Diego then back home to Minnie through northern AZ and Colorado... that was in 1938. He had family on the west coast and his father [my grandfather] worked for the railroad so had all but free passes... he was 17.
The kid he made the trip with came from a farm - my father from 'town'. My father said he was amazed at the beauty of the west would go on and on about it... his friend said it all looked the same to him... like hunger [outside of the Columbia Valley and Cali Central Valley which had 'real farms']. His friend said the most beautiful part of the trip... Iowa & Southern Minnesota... plenty of water without irrigation and fertile top soil 6-8 feet deep everywhere. Even harsh winters are your friend - kill many of the worst insect pests.
If you got tons of money - those hardscrabble acres are great... if not stick to the city or buy a real farm.
I've done all those things before; seems like my dad had us build everything growing up. I'd rather pay for skills better than mine, but they do come in handy for some things.
dryfly, I just need a half acre for a garden and a few acres for some chickens and a miniature Jersey or two Nubian goats.
More importantly, the place has to be difficult for bad guys to reach: 100 miles+ from a large city.
Lots of good places in Idaho, Montana, Wyoming, Upper Peninsula Michigan, etc. And, I lived in MN for four years and thoroughly enjoyed it.
But, for family (i.e., wife) tranquility -- easy, quick bug out at the last minute -- during the remaining weeks/months of peace in SoCal , I need something close, hence, northern Arizona.
My dad's dad left the farm (in Kansas) in the late 30s to weld ships in Long Beach. My dad was left behind to sell the farm. He ended up in Long Beach after the farm was gone and started college there, ending up with a couple of degrees from Berkeley.
The idea of going back to the farm is not all that distant to me.
What does real land look like? Do you mean water supply? Are you talking flatlands?
Carl Sandburg described it once as 'earth so good it looks like you could eat it without passing plants through it first'...
I had a girl friend who grew up in north Alabama - raised on red clay played out 100 years before her mother was born [1930s]... she saw my parents garden in S Minnesota and couldn't believe land was that good - top soil that deep - anywhere left in America.
And it is still out there though we are doing everything in our power to destroy it.
josap, I read Joel Salatin (Salad Bar Beef, You Can Farm). He says he has long days during haying season, but that life is slow and good in the winter. I vaguely remember that he accomplishes his tough chores in a few hours daily.
Seems like a good life.
Especially in comparison to my 6:30 a.m. to 6:30 p.m. days stuck inside, non-stop, in an office.
. being a farmer sucks. it is incredibly hard work
It's good for those who like hard work.
As an example: My FIL is proof that medical science is incomplete about cholesterol; He has 2 hamburgers for breakfast and is in good shape @ 70. One day, I went out to help him feed the cattle, and I had my normal bowl of cereal. When I came back in for lunch, I was ready to eat a horse.
And I can't imagine what life was like before the tractor, which did most of the real work.
So Outsider: What is the housing market like in southern NH? I track CT and Boston to some degree, but I have no idea about NH. Did they have Boston-sized bubbles?
CIT Talks Fall Apart, Bankruptcy Filing Likely Friday CIT Group, is likely to file for bankruptcy Friday, a source close to the company tells CNBC. The major lender to small-and mid-sized U.S. businesses had been surprised at the failure of bailout talks.
CIT is now pursuing a plan that is likely to include a chapter 11 filing on Friday.
Whew! Glad that's over.
Pigged on previous thread. Reposting.
Here are some conclusions that I take away from this lack of action on CIT today:
Like there was ever a question
whether by hook or by crook, Cali was going to get it done
CIT might be too small to call
but cali was always TBTF
that's why their munis never saw truly significant downward pressure
Passing a budget ?
Thta's just ratifying the cuts that will suck even more money out of the economy ...
austerity measures.
fed facilities are soooooooo 2008
Portentous porcine pushed off the precipice previous post:
nova (homepage, profile) wrote on Wed, 7/15/2009 - 5:35 pm
from the ny link
...Cities can try to borrow the amount they are losing, and the agreement calls for the state to repay them over three years, but many of the weaker localities may face the prospect of defaulting on their bonds.
That's the money Oxnard was using to finance their leaseback arrangement for their own city streets. Ruh roh.
barfly (profile) wrote (in reply to...) on Wed, 7/15/2009 - 5:41 pm
[impending California budget agreement] Well done, RD. What's next?
The Cities are an unpredictable bunch. I expect the gas tax diversion is going to be their target of opportunity.
California's budget is "funny".
Budget magicians use sleight of hand to help close California's giant deficit
Expenses still too high? Here's a really creative one: Push back state employees' monthly paychecks in June 2010 by a single day — from June 30 to July 1 — and thus onto the next fiscal year's books. Just like that, $1.2 billion "saved."
Mr. Beach: Bair is secure in her position at the FDIC - likely with strong supporters in Congress and the White House.
I disagree. I think Geithner, right now, is more secure. The Administration had no options left for CIT, and it couldn't force the FRB or FDIC to play ball because of the agencies' independence. Damn, Congress actually did something right...
I left a post on the previous thread about the 50-employee provision.
And next year for Cali?
Wage cuts = less tax revenue = more layoffs = less tax revenue = more furlow days = less tax revenue.
Higher taxes = increased tax revenue = fewer businesses = more layoffs = less tax revenue.
Don't see a win win here.
Not counting forclousures, out migration.
That was my featured link on today's Daily California Watch.
Truth is California's Constitutionally balanced 08-09 budget ended ~$8b in deficit precisely because of tricks like this.
Can we haz constitutional convention now?
I can't wait to hear the screaming from the cities when the details are rolled out.
It may not just be the weaker cities that are in danger of defaulting on their bonds when the state grabs more of their tax income.
'Expenses still too high? Here's a really creative one: Push back state employees' monthly paychecks in June 2010 by a single day — from June 30 to July 1 — and thus onto the next fiscal year's books. Just like that, $1.2 billion "saved."'
The farmer figured he'd cut back the horse's feed by just a few wisps of hay and a few ounces of oats every day, and the animal wouldn't even miss it. At the end of the year he expected to save a lot, but the darn horse died before New Year.
Push back state employees' monthly paychecks in June 2010 by a single day — from June 30 to July 1 — and thus onto the next fiscal year's books. Just like that, $1.2 billion "saved."
So push from June 30 to July 20 and $24 billion saved?
Mission accomplished.
California's extremely progressive income tax has a nasty impact in a declining wage economy. Thus the latest trial balloon out of the bureaucracy:
Commission considers flat tax for California» Ventura County Star
The commission’s staff analysis concludes that the 6 percent flat tax would increase the share of state income taxes paid by 93 percent of tax filers (those with taxable incomes of less than $100,000), slightly decrease the share paid by the 5 percent of tax filers with incomes between $100,000 and $200,000 and dramatically decrease the share paid by the 2 percent of filers with incomes of more than $200,000.
The share paid by that top category would drop from nearly 40 percent to less than 30 percent. The share paid by those with incomes between $20,000 and $50,000 would nearly triple, from about 5 percent to about 15 percent.
"Can we haz constitutional convention now?"
no shit, SM. time to press the big reset button on all of that "progressive" garbage from the wilson era that helped get us into this mess.
while we're at it, we should repudiate all of the GO bonds and become "new california".
Rob Dawg:
Your thoughts? Will this work, or will we be reading about another crisis in 3-4 months. As I recall, the February deal was supposed to have resolved the budget mess.
but the darn horse died before New Year.
Worry about New Year when New Year arrives.
Basel Too: I think FDIC's open reluctance to support CIT and Bair's dismissal of PPIP earlier suggest that she is confident in her position. Politically, big Wall St bailouts have not played well on main st. Bair has openly supported foreclosure mitigation from the start and that has won her supporters in Congress.
Since Obama cherishes strong debate, I suspect Bair also has support at the White House.
"the February deal was supposed to have resolved the budget mess. "
the revenue bag cam in very, very light in april.. making it a 30-40bil hole instead of a 5-15bil one.
"Worry about New Year when New Year arrives."
You can do that. It's always an option.
you folks realize that 2.5 billion to CIT, and the hundreds of billions to FRE/FNM/GS via AIG could have more than filled all the budget issues of all fifty states, right?
"you folks realize that 2.5 billion to CIT, and the hundreds of billions to FRE/FNM/GS via AIG could have more than filled all the budget issues of all fifty states, right?"
It happened - in an alternate universe to which access is denied.
Hollywood -Goldman paid the TARP funds back, their heroic American, true citizens..
I don't get it CR. Furloughs lead to more layoffs? What, like causally? Confused.
C
I sure do, Hack.
I sure do.
CLU will host town hall on constitutional convention» Ventura County Star
The movement to rewrite California’s Constitution is coming to Thousand Oaks.
Repair California, the organization working toward placing a ballot measure on the 2010 ballot asking voters to convene the state’s first constitutional convention in more than a century, announced Wednesday it will conduct a town hall forum. The event will be held Aug. 3 on the campus of California Lutheran University.
The Thousand Oaks forum will be one of eight such events that will take place across the state between next week and the end of August. The initiative sponsors will weigh public comments as they draft the proposed initiative, which they intend to submit to state elections officials in late September.
Today's budget agreement is not going to work. Too many special interests feel they are being singled out. Gutting UC like that was probably a strategic mistake.
"in an alternate universe to which access is denied. "
yes, an alternate universe where we don't spend trillions on overseas wars of choice and one GS broker's livelihood isn't worth 10,000 schoolteacher jobs in federal priorities.
PPIP isn't interesting anymore because banks can't bid on their own assets not Sheila.
Just about got pigged in the other thread; I'm a little slow with the one-handed typing while my 3-week old sleeps in my other arm...
Rob Dawg (homepage, profile) wrote on Wed, 7/15/2009 - 6:37 pm
reply ignore user
Obama doesn't "hate" small business. He has no idea what they are and what they do. His background just has no exposure to their issues.
On this point I'd disagree. Obama knows small business. His neighborhood in Chicago (Hyde Park) is one of the very few that is dominated by small, independent businesses. It's wealthy enough to have a stable economy but black enough that the national chains stay away. Even the grocery store is a local co-op where the residents buy ownership shares to shop there.
Magic Johnson made billions investing in these areas around the country. If anyone in America really knows small businesses, a black family with disposable income is it. There must be some other reason for the lack of a bailout for CIT.
Hollywood -Goldman paid the TARP funds back, their heroic American, true citizens..
Absolutely true. While many mock Goldman, their coldbloodedness make US investment banking still the best in the world. Take that China!
Broward:
Are you a bull now? I was feeling more optimistic until I visited downtown Saratoga Springs today. On a gorgeous summer day at the height of the tourist season most of the boutiques lining Broadway had the feel of masoleums. Deserted. The restaurants looked OK, but the retailers were obviously hurting. A couple of shopkeepers I spoke with said they haven't seen the the tourist spike yet. If things don;t pick up, these guys will be dead by the end of summer. Just my personal observations.
Yeah- I have to thank them for the $4 a gallon gas prices last summer too
too bad they wouldn't think for a second of paying back the AIG money funneled their way...
though, when it comes down to it, even though GS is satan incarnate, FNM/FRE is a much deeper hole which continues to ooze blood.
It happened - in an alternate universe to which access is denied.
Not to people with the right magical dust.
I'm sure CSC is there.
RD For Gov Of Low Cal! Can I vote as out of state expat?
from the article:
"Ross said while a flat tax might reduce volatility, it would also depress growth in state revenues, which would lock in today’s budget problems indefinitely."
i'm sure they wish they could go back in time and take a piece of GS instead of blackrock...
speaking of which, how does a few billion market cap shop like that swallow barclay's in the middle of this mess? layers and layers of opacity...
Obama doesn't "hate" small business. He has no idea what they are and what they do. His background just has no exposure to their issues.
Does Obama have exposure to anything but going to law school and running for political office?
I wonder if Skilling and Fastow are available to the California legislature as consultants to help balance the budget.
Welcome to the future of America. Cali may be first but watch most other states start similar cutbacks.
Details emerging from the talks suggested that the deal will require extraordinarily deep cuts to school systems and local governments ( hey they can become more like Texas that ranks 37th in education ) and while far smaller than the governor threatened a month ago, substantial cuts to health care and other social services ( yikes ! )
California v Texas
America's future
Premium content | Economist.com
Highly recommended you read full article
Are you a bull now?
I think we've hit bottom, yes.
The mental impact of The Crash peaked sometime around March.
I was playing around with graphing of "Roubini" and "Krugman", etc.
Many of the graphs show a peak in March so I think the mental impact and reaction to The Crash peaked and has passed.
"Many of the graphs show a peak in March so I think the mental impact and reaction to The Crash peaked and has passed. "
That must mean it's time for phase two...
"Does Obama have exposure to anything but going to law school and running for political office?"
Community organizer, All sucking the blood out of others. Never turned a dime in the business world.
mal:
Does any politician have expose to anything besides law school, campaigning, and the odd MBA? Our biggest mistake was instituting yet round legislatures that require full time politicians.
"FNM/FRE is a much deeper hole which continues to ooze blood."
I know someone who worked for one of them, but bailed out recently, and is now working for NIH instead.
Blood can curdle as well as ooze.
Willem Buiter gets some FT column inches on this too (apologies if previously posted):
FT.com | Willem Buiter's Maverecon |
Some unpalatable stuff there.
C
"substantial cuts to health care "
That may be bitterly regretted.
It's hunker down time in Sacramento.
Lots of families that two bread winners in state gov so those furloughs are a huge hit. A large portion of my my friends work in gov, healthcare, or education. Most bought their homes in 98 and 00 and thought they would always be safe because of the equity cushion. Now even those with 100k household incomes who were previously the first to whip out the credit cards for everything are now suggesting going to the Crocker on the free admission days and eating a picnic lunch in the park instead of going to to the 33rd st bistro 6 times a month.
The capitol needed these late boomers and early X Genners to keep spending their little hearts out to break even so if gov workers have less disposable income, everybody gets to share the pain.
I've been tracking the rate of change of total listed jobs on Dice.com.
That number looks like it's bottomed out, too.
Today, right now, it's at 48.8K and it's been in that range for a couple of months.
I recorded 51.2K in March, which seems to be a pivotal month.
Why doesn't CA withdraw from Iraq and Afghanistan?
That must mean it's time for phase two...
That's possible but I think it has to be a surprise.
CA budget is already baked into the cake.
What huge surprise event can you imagine which hasn't already occurred?
Broward:
I think the financial sector bloodletting has peaked and the worst is behind us; trillions in federal backstops have guaranteed that. I think the long, slow grinding recession in the real economy still has a way to go. All the real economy indicators (rail traffic, port traffic, retail sales, etc) still look very weak.
The poor and needy in California get screwed again. Just an example of what the rest of the country will experience.
"The difference between liberals and conservatives is that liberals want a better life for everyone and conservatives want a better life for themselves."
See what a little distraction like Michael Jackson overdosing did to the media. Distracted them from reporting on the economy for two weeks, consumer confidence goes up and the recession is now over.
MJ died for our sins so that we might be saved.
"What huge surprise event can you imagine which hasn't already occurred? "
I disagree that it needs to be a surprise, at least not to CR readers.
Just a retest of S&P 666 along with some state bond defaults would be plenty.
"Distracted them from reporting on the economy for two weeks, consumer confidence goes up and the recession is now over."
It only collapses if you watch it. That's particle physics. I didn't know economics had a similar rule.
I disagree that it needs to be a surprise, at least not to CR readers.
I'm okay with that.
But the housing crash is now into its fourth year. If you study previous depressions going back the past 150 years, they're surprisingly range-bound, usually 3-5 years. Even the Great Depression bottomed in the fourth year.
I don't like the idea of a flat tax at the national level, but I think it works well at the state level when the state also has a balanced budget requirement. I think it limits the growth in the boom years so things aren't crashing down as hard in the bust. My own state of Illinois demonstrates that you can still get into major trouble with a flat tax, but when the governor proposes to raise the tax to fix the deficit you get huge amounts of pushback from all sides, unlike Maryland which easily passed a huge tax increase on millionaires only to discover that half of them disappeared leaving them in worse shape than before. I think you come to the realization that you have to cut spending sooner rather than later. For this reason, I think it would be good for California to adopt a 6% flat tax.
I'll call it a self-fulfilling prophecy.
Long Heisenberg uncertainty bonds!
C
Thanks for reminding me, I need to tune my spam filters. MJ spam coming fast and furious.
Broward-segments of the board are ready to admit you are right. Even CR can see an end of the Great Recession in Q3 naught nine.
time for Sports and Wine
Benfolds5
"The difference between liberals and conservatives is that liberals want a better life for everyone and conservatives want a better life for themselves."
Bullshit. Liberals are just as selfish, just with other people's money. The biggest beneficiaries of programs for the poor are the middle and upper middle class professionals that administer these programs. I am no conservative, but I know graft when I see it. To quote a sixteenth century monk: "The poor are a gold mine."
HollywoodHack (homepage, profile) wrote on Thu, 7/16/2009 - 12:57 am
you folks realize that 2.5 billion to CIT, and the hundreds of billions to FRE/FNM/GS via AIG could have more than filled all the budget issues of all fifty states, right?
Give your money to Bonnie or to Clyde.
Either way, they divy up at the hideout.
broward (homepage, profile) wrote on Wed, 7/15/2009 - 6:20 pm
But the housing crash is now into its fourth year. If you study previous depressions going back the past 150 years, they're surprisingly range-bound, usually 3-5 years. Even the Great Depression bottomed in the fourth year.
Huh? Jun '06 does indeed put us into the 4th year but if instead you use the NBER Dec '07 we are only in month 19.
You are all aware, I am sure; that Black Swans do NOT have sphincter muscles.
"Long Heisenberg uncertainty bonds!
C"
A great theoretician, but he screwed up Germany's bomb project, thank God.
I hope our economic theoreticians can do better than that, without blowing us up.
Kerrist, Nikki up 2.26% already. Good morning being had. Fundamentals look like shite so it all makes sense.
C
To quote a sixteenth century monk: "The poor are a gold mine."
Was his last initial L?
In the SU, it was the poor zeks who worked in the gold mine.
Jun '06 does indeed put us into the 4th year but if instead you use the NBER Dec '07 we are only in month 19.
I consider the NBER irrelevant, I pay no attention to it.
Housing inventories inflected in Oct/Nov of 2005 and homebuilder stocks finally took note and crashed in Mar/April of 2006.
Not One Cent (homepage, profile) wrote (in reply to...) on Wed, 7/15/2009 - 6:22 pm
HollywoodHack (homepage, profile) wrote on Thu, 7/16/2009 - 12:57 am
you folks realize that 2.5 billion to CIT, and the hundreds of billions to FRE/FNM/GS via AIG could have more than filled all the budget issues of all fifty states, right?
Give your money to Bonnie or to Clyde. Either way, they divy up at the hideout.
I'm being serious about the new surprise.
What could trigger a new panic?
Well, I have actually started thinking about shifting jobs, so one could think that the d/rec/pression is lifting a bit. A bottom we have, for at least a while.
That inflation number provides the impetus. Zero chance of any increase in pay where I sit- move or fossilize.
Someday this war's gonna end...
"I'm being serious about the new surprise.
What could trigger a new panic?"
The Japanese could bomb Pearl Harbor again.
"The biggest beneficiaries of programs for the poor are the middle and upper middle class professionals that administer these programs. I am no conservative, but I know graft when I see it."
ding ding ding. we have a winner.
I am having a hard time understanding how 1.5 billion from about half the California budget, education, adds up to a deal to close a 20+billion dollar hole. The entire story looks and smells like bullshit.
no dawg, I agree with Broward, Great Recession is 22 months of age in the month of our lord timespace contin-ue-uhhhhmm..
august naught 7 was the credit crisis kickoff party. which pitched a softball to mr great recession who smashed a double crash off the right center field fence. Benny had to pull off the stick save. Timmay cant close. Sheila is knocked out.
Bucky dismisses the Pound from the pitch.
I'm not sure what the effects of national care would be.
The proposed 5% tax on the rich would probably be a net positive on sentiment.
The only things I can think of are Israel & Arab war.
I suppose the Chinese could dump bonds but why now?
Japan could default in some fashion.
The past three years were pretty momentous.
They're a hard act to follow.
Zeks. I remember the term from Gulag Archipelago. As for the monk, as I recall he was German, I don't remember the name.
Broward:
I don't think there will be a new panic. I just think, like the Great Depression, this contraction will grind on for years. It only seems different this time because 1) we time compress the Great Depression and 2) we have an entire segment of the MSM (CNBC et al) dedicated to pushing good news.
Look how quickly the MSM mood changes. Two weeks ago, when the payroll number came back much worse than expected, the green shoots turned to weeds. Same thing last week when the retail sales reports showed worse YOY comps. This week, based on strong earnings from Intel, the recession is over. I think the truth is in the middle. Over the past month, a lot of indicators (consumer confidence, restaurant performance index, architectural billings, etc) have stagnated. Like I said, a long, slow grinding process.
the thing about it is the long unwinding hasnt started in a lot of places so if they want to call recovery they will, can,and have to.
but im still decreasing needs and putting wants on a list. planing for the worse hoping for the best.
Folks, I started a regional blog for Maryland people since we haven't had a place to post in a long time, and there seems to be some interest.
Maryland Bubble Fallout
I am not sure what the etiquette is for pimping this here. I'd like to mention it at least one more time here at CR but I don't want to be a spammer.
None of these are predictions:
A large country unable to sell it's bonds would be a surprise.
A bankruptcy by a seemingly secure company (not GM, etc) would be a surprise.
A major battlefield LOSS in iraq/afghanistan would be a surprise.
again, these are not predictions.
(btw, I agree w Broward. Peak Fear was in March.)
Broward. Beware the unknown unknown.
I just think, like the Great Depression, this contraction will grind on for years
That's the definition of a bottom.
Things don't get worse.
bANK fAILURE (profile) wrote on Wed, 7/15/2009 - 6:34 pm
no dawg, I agree with Broward, Great Recession is 22 months of age in the month of our lord timespace contin-ue-uhhhhmm..
Yeah I agree (I threw out 19 NBER) but broward was pushing for Oct '05 for 40+ months.
Coincidentally I called the bubble popping Oct 6th, 2005 shortly after breakfast when my biweekly housekeeper announced in her best broken English that she had bought a house for 3x what mine cost. Bubbles popping are not great recessions. That took a lot longer to gain traction.
Pandemic ...
That would cause another shock to the system ...
C,
I used your hopium in the story I am writing.
Somebody taking down the internet, that wouldn't be a surprise (there's lots of talk of it's vulnerabilities), but if it actually happened, it would be a shock.
Again, not a prediction.
I think the correction happened fast, the economy needed to contract by about 10% when the housing bubble burst. Businesses have stabilized for the most part outside of CRE and the last group that needs to adjust are governments. For the first time in decades they need to get their balance sheets in order resulting in higher taxes, smaller government and a cram down.
I don't think Iraq or Afghanistan matter, economically.
Failure to float bonds could be a big upset but i'm not sure why would it happen now.
I think at worst we see a gradual increase in interest rates which keeps the economy zombiefied.
I don't use the Oct 2005 number because nobody recognizes it but the homebuilder crash in Mar 2006 was exceptional.
So Arnie's going to put kids on waiting lists for health care? That'll save money until the kid with no doctor gets put in an ICU for an asthma attack that could have been prevented by a six dollar inhaler.
Somebody taking down the internet
Already happened early in the year.
Somebody cut the main backbone in SF.
Didn't notice, did you?
A pandemic would be bad for:
Airlines
Food service,
Brick and Mortar stores
productivity
Good for:
End of the world christian ministry
Amazon
funeral homes
Broward:
Things don't get worse, as long as you aren't the one being ground down. Things didn't get worse between 1933-1937, but the misery remained elevated throughout that period. I think lots of people here may share your opinion that we've bottomed. I think most believe a return to robust growth is very, very unlikely for the next few years.
Dawg--my housekeeper quit in 2006 to sell real estate. She called me "El Diablo con Basura". Never had a title before.
so, who's the deal with?
Swine flu came and went and Mr. Market chuckled quietly.
I, too, thought it would be significant but...
I suppose I'm left with the ever-popular "unspecified terrorist event".
"I don't think Iraq or Afghanistan matter, economically."
~~~~
They contribute to a military budget close to $1 trillion dollars ...
We could cut the military budget by 60% and be safer by not being in some else's country ...
"..........to close the state’s $26 billion budget gap .........The deal also required the use of accounting devices used by all states in a time of crisis, like putting off programs or payments until the next fiscal year so the budget gap does not seem as large. Local governments.......will probably lose far more ..... when the state begins dipping into tax streams on which they depend, including gas taxes." (Emphasis added)
.....I thought it was $26-billion MONTHS ago, and the budget gap is not solved - just ignored until next year (see emphasis added) - kind of like our "immaculate recovery". Smoke, mirrors, and the squint of the bad eye makes it all better. I call Bullshit - otra vez.
Sorry if some other old grumpy guy already has commented on this. I just got up from my cat nap on the wrong side of the cat box.
New surprise?
Launch of an Iranian nuke.
Fatal and fast moving flu beginning this fall.
I think it is a given that tax receipts at all government levels will continue to fall, and that at some point the Chinese, Japanese, and sheikhs say, 'No mas.'
I think that happens as early as this fall.
Shorter days and longer nights beginning in the fall make for panicked reactions by hoi polloi and their overlords on Wall Street, who merely are more aggressive and less inhibited.
as long as you aren't the one being ground down.
I start my 10th month of unemployment tomorrow and my car is nine years old, although my sex life has never been so good.
Broward:
Sorry to here it (except for the sex part). What's your trade?
Broward: Green Shoots for you may require Penicillin.
broward
a REAL pandemic ...
with a high death rate ...
it is well known that during recessions and depressions people's immune systems suffer ...
Agree with squidward. Once a semblance of calm returns, the yield hunt has to continue, and the system is still both tightly coupled and unstable. The surprises, such as they may be, are most likely to be of most impact in good ol fashioned bond vigilantism and currency speculation. It won't take much for a momentum player to find something potentially wobbly, give it a push or two to test, and then short the sh!t out of it. Political crisis, health, or a major accident could help things along.
If it starts to look like carrion, someone's gonna make it so.
C
dopio
hear, not here. Dammit.
Okay, I'll bite; what kind of woman would want to have 'relations' with an unemployed guy with an old car? Are you cruising the bad part of Philadelphia or something?
Don't worry Goldman Sachs is working on the next asset bubble, probably be water or some agricultural commodity, unless the cap and trade gets passed, then carbon.
Swine flu is having impact in UK, recent deaths were a child and a GP...
"The number of people diagnosed with swine flu soared almost sixfold during the course of last week in some parts of England, NHS figures revealed today.
The virus is spreading fast across much of the country and the total of those affected rose by 42% in the seven days up to last Sunday, according to data provided by family doctors.
Information collected by the Royal College of General Practitioners' research and surveillance centre in Birmingham, which monitors communicable and respiratory disease, shows that the rate of people diagnosed with influenza-like illness in the north of England leapt from 6.6 per 100,000 of population during 29 June to 6 July to 37.2 per 100,000 between 6 and 16 July."
Swine flu cases soared sixfold last week, NHS figures reveal |
World news |
guardian.co.uk
The bad part of Philadelphia? You mean Philadelphia. Off to work, starting the mid shift this week.
uhh..
this is not a prediction.
Bucky dismisses the Pound from the Pitch.....ask any island nation inflation.
Germany denominates bonds in USD, Brazil denominates Bonds in USD, India Denominates bonds in USD..
accounting device=
I predict a six figure consulting gig for Broward, most likely telecom related. could be an Isreali company.
so it's basically the Seventies Show re-runs or Japan 2.0.
then again, how many people were aware of LTCM (all $4B of it) before the Committee to Save the World had to convene?
You might see a biotech runup as well. The ability to alter organisms is really getting quite sophisticated right now.
The panic ended in March. I have always thought we would muddle through, for a while, until the baby boomer retirment numbers lifted off. At that point, a funding crisis for the US government seems all but inevitable to me.
How about people rioting for health care? Flu Shots?
Sure, to be expected, accounting gimmicks to save a billion here or there.
But, if Ahhnold truly stiffs the Dems and all of the gap closing is cuts or gimmicks, awesome!
"The ability to alter organisms is really getting quite sophisticated right now. "
I just hope they are not working on Black Swans!
you wanna see whats in my head?
Hiroshima (BBB Benny Hits his Head)
benfolds5
*most of you prolly didnt see what I did with sports and wine.
people rioting for health care? Flu Shots?
Hunh? Who's gonna riot for health care? Too abstract. When you need it, you're in no position to "riot."
.
Nobody with the flu will riot. Nobody without the flu will riot for shots.
Oh yes... A Katrina would be costly and a nice kick off to flu season while in the background states go broke
Why not? Think of Wal-mart just before the start of the Christmas shopping season
Riots, when they occur, are over a perceived affront. Not over policy.
I have always thought we would muddle through, for a while, until the baby boomer retirment numbers lifted off. At that point, a funding crisis for the US government seems all but inevitable to me.
Yes.
That's my point about the Feds manage cash flow and ignoring balance sheet. As long as they can maintain cash flow running through the economy, they can maintain some level of order. Once the balance sheets come into question, though, that's a big issue.
I'm in IT, stuck in consulting now for five years.
It's just too dishonest and flakey, it's all about netting large piles of money and delivering some perfunctory crap.
I tried to get out in 2006 but once you're typecast....
I had peak panic in March. Had to unplug for a couple of weeks. Couldn't figure out how the big save was going to happen. Guess I hadn't read enough of Krugie and Ben on the miracle of the pump and printer.
How naive I was.
(Course I don't think global public debt is sustainable, but that's for another day)
C
broward - unsolicited advice - you should be in marketing.
Much of your commentary is on what's hot and what's not. And you can quantify it. That's marketing, not IT.
Gee most posters just yucking it up as the future of America looks more and more like a much BIGGER version of Argentina or Mexico .
Once again highly recommended you read full article because 'CaliTex' is setting the new tone per above and with worst of both
California v Texas America's future
Premium content | Economist.com
I am standing outside the county health clinic. My daughter and son are with me. Their friend died yesterday of the flu. The county person comes out and says"We are out of flu shots for today."
The county person comes out and says"We are out of flu shots for today."
And you do what?
.
But if no "county person" comes out, instead a sign is posted, "We are out of shots today" you do what?
.
Suppose it's not a "county person" but a nurse. You do what?
nova, no fair doing real life after running after the crash and the american apocalypse.
re: heisenberg A great theoretician, but he screwed up Germany's bomb project, thank God.
There is some evidence that Heisenberg was not eager to build an atomic bomb for germany. i forget the exact reference.
The panic ended in March.
Which March? Seems we had the BSC debacle last March, then another meltdown this year.
Oh, and Broward, the Florida land bubble burst 4 years prior to the start of the Great Depression, so I wouldn't be going on housing.
bank failure,
Hoops has after the crash.
Has anyone else suggested a bigger and better Madoff as a triggering event?
<
p>
My two-cent prediction: CIT will go BK, with enough high-profile consequences that Corus and others will get bailed with not-too-many complaints. CIT will play same role as Lehman did.
Anyway, in a true pandemic, no group will riot because those who truly care will avoid crowds.
No riots can happen.
dont try and sidetrack me at lefties liquors mr nova.....I read yer shtuff.
counterpointer: i remember March, quite humorous in retrospect. every fricking day, Joe Shmoe promising that Geithner would nationalize Citi and BAC by reading his wrinkles and eyebrows. Glad I went long BAC at 4...
It will be interesting to see what the rating agencies think about most of the "solution" being accounting gimmicks.
Sorry, folks, but I don't buy that this mess has even bottomed. As Doug Noland has stated (and I'm totally paraphrasing), all those Federal backstops are alleviating current crises in favor of creating the "mother of all crises" down the road.
bank failure,
lol
If we are at a bottom why are the train and port numbers going down?
"It will be interesting to see what the rating agencies think about most of the "solution" being accounting gimmicks. "
~~~~~
I see Congress will be looking into the Credit Rating Agencies ...
Coincidence ?
the good news about acounting
's going off is we are getting into the "Writ-ups"
Writs of "Hey, He's a Corpus."
left off on the "E"
U.S. may lose $2.3 billion CIT investment:
U.S. may lose $2.3 billion CIT investment: WSJ - MarketWatch
Surprise!
We need to start an age poll with your feelings on the economy...My take of my family and friends: People my age are scared. But this is unknown for us. Boomers, for the most, 70s revisited. Our golden members, feels like 1930... Be interested how this view holds up out and about the country...
A reference representing the people who believe that the Gernan scientists did NOT fail on purpose: Jeremy Bernstein, THE FARM HALL TRANSCRIPTS. Some background may be found on wikipedia under "Operation Epsilon".
tj and the bear
i agree with you but they have to say its over.
lets see now jpmorgan got saddled with bearstearns
boa got countrywide and merrell
wells fargo got wamu
and goldman sachs got who?
morgan stanley got who?
@TJ and The Bear (profile) wrote on Wed, 7/15/2009 - 7:09 pm
Sorry, folks, but I don't buy that this mess has even bottomed. As Doug Noland has stated (and I'm totally paraphrasing), all those Federal backstops are alleviating current crises in favor of creating the "mother of all crises" down the road.
Yup that's what politicians do...kick the can down the road....Bush did a great job of doing this from 2000 - 2008 but Obama has NOT figured out that there's not much road left to kick the can down before the "mother of all crises" hits !
Barney Frank, GOP Go After Credit Rating Agency Dominance
An unusual alliance could see that governmental gift rescinded. Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, says that a GOP plan to confront the credit rating agencies is something he can get behind.
The GOP has proposed ending the requirement that lenders use three specific agencies to rate financial products. With the requirement to use the agencies repealed, banks could elect not to have an instrument rated by one of the big three agencies. There are market pressures, of course, that would encourage the use of rating agencies, but under the reformed law, new agencies would be entitled to enter the marketplace. The free market, rather than a government mandate, would determine whether banks use rating agencies -- and which ones they use.
Barney Frank, GOP Go After Credit Rating Agency Dominance
TJ - I don't buy that it's bottomed either, but right about now is different from last Sept/Oct, and March. The discussion started on whether peak panic had subsided.
C
jpmorgan got wamu.
wells got wachovia.
"I have always thought we would muddle through, for a while, until the baby boomer retirement numbers lifted off."
"How about people rioting for health care? Flu Shots?"
......I would imagine you have many more BBs staying in the workforce now and competing with their kids and grandkids for those scarce jobs instead of saying "screw it and bailing" like I did.
People can't get up off the couch to riot for anything IMPORTANT - much less for some unknown healthcare propgram that will end up costing twice the total anticipated and be less than a third the program hyped. I might also suggest they start with the percentage of the 46-million first that WANT healthcare insurance before subjecting the entire population to the new program.
Flu shots? I don't think so.
depends on your definition of a bottom, nova.
timers device Aggressive Contrarions live here
want the Barking Bear?"
Basel Too
"counterpointer: i remember March, quite humorous in retrospect. every fricking day, Joe Shmoe promising that Geithner would nationalize Citi and BAC by reading his wrinkles and eyebrows. Glad I went long BAC at 4..."
Short it at 12 and you will be a genius .
C,
It has for me. I am no longer prep'ing for the end of the world as we know it.
Counterpointer,
I'd suggest that "peak panic" hasn't hit yet. If you're into "head and shoulders" formations, we're only past the left shoulder.
im a war baby reminds me of the late 60s early 70s with boomers demanding change without nothing to replace with.
squid
thank you jpmorgan got bs and wamu
forgot all about wachovia
The WSJ article says $11 billion is accounting gimmicks.
California Is Close To New Budget Deal - WSJ.com
that would imply a head at 980/990 spx, tj?
Well, I see BofA is sending out "convenience checks" again. This time with a 4.99% "promotional rate" until April 30, 2010.
It would be fun to see if a different bank would take them...
But no, in the shredder they go, as always.
Interesting site. Thanks.
SEC Chair Seeks Transparency of Credit-Rating Agencies
By AUSTIN KILGORE
July 14, 2009 4:02 PM CST
Advertisements
The Securities and Exchange Commission (SEC) chair Mary Schapiro is seeking authority to mandate enhanced measures to promote the transparency and integrity of the nation’s statistical ratings firms, including the limitation of ratings shopping, according to testimony delivered Tuesday to a House Financial Services subcommittee.
Ratings agencies have faced criticism for over-rating mortgage-backed and other asset-backed securities created by their clients but that were comprised of assets that turned out to be toxic. Since the subprime mortgage fallout, critics have called for regulation of the firms.
SEC Chair Seeks Transparency of Credit-Rating Agencies : HousingWire || financial news for the mortgage market
Every day there's an article that California is "near" a budget agreement. What's different about this report?
nova - I confess to running out of energy prepping for TEOTWAWKI. And sleep. Much better prepared now, ironically!
TJ - not really a technicals guy... But I get the drift.
C
Basel BAC at 3 and Citi at 1 had noting to do with whether they were being nationalized it was about what people thought was the true value of the equity.
so, BG, we assume that the budget impasse isn't solved, and this grinds on another month - at what rate are you a buyer of GO bonds? how does your answer differ if a FTB taxpayer or not?
that would imply a head at 980/990 spx, tj?
I was talking strictly about panic levels, not market levels.
If $11 billion of a $26 billion gap is gamed, they haven't done anything.
I'm not a chartist or wavist or Fibbonacian or whatever flavor TA is pushing this week but I find it incredible to think we won't revisit the March lows in the markets.
"The WSJ article says $11 billion is accounting gimmicks.""
~~~~
Cali is deep fried chicken next budget ... as are a lot of states ...
had noting to do with whether they were being nationalized it was about what people thought was the true value of the equity.
Yes, and no. It's one thing to think that C is worth a buck. It's another thing to naked short multiple times.
The WSJ article does not spell out what it considers a "gimmick"
(other than the paycheck date change)
C,
Yeah, panic level anxiety is a real energy drain. But yeah I am more ready. I just don't have enough ammo and you wouldn't believe how long it took me to get 4 claymore mines.
"The WSJ article does not spell out what it considers a "gimmick" "
You're asking the wrong question. With respect to the Cali budget, the correct question is: What is not a gimmick?
Dawg,
Yes, we haven't seen the bottom of the markets yet, just like we haven't seen "peak panic" yet. For us regular Californians, the term is "foreshocks". For HollywoodHack types, it's "foreshadowing".
Even the grocery store is a local co-op where the residents buy ownership shares to shop there.
Not any more--it went bankrupt a couple of years ago. I was a member; so was Obama if memory serves. It's now been replaced by a chain store, but it's a small Chicago chain (Treasure Island).
But I agree with your general point. It's not just Hyde Park; all the south side communities where he worked and organized are dominated by small businesses if there are any businesses at all. You can't do community work there without meeting and working with a whole lot of small businessmen.
Gimmick: Paying the June payroll on July 1st to push several billion onto the next fiscal calender.
nova - Home Depot Falls Church all out, huh?
C
I think the long, slow grinding recession in the real economy still has a way to go.
If by 'real economy' you mean non-Goldman Sachs...
You are right, it is short on detail. (They give one example - delaying the issuance of paychecks from one month to the next.)
Gimmick: Paying the June payroll on July 1st to push several billion onto the next fiscal calender.
What else?
and you wouldn't believe how long it took me to get 4 claymore mines.
Seen that "Royal Pains" commercial? "... and a block of C4, because you never know when you'll need a stable explosive"
@TJ and The Bear (profile) wrote on Wed, 7/15/2009 - 7:24 pm
Yes, we haven't seen the bottom of the markets yet, just like we haven't seen "peak panic" yet. For us regular Californians, the term is "foreshocks". For HollywoodHack types, it's "foreshadowing"
and for others its just 'foreplay' until the final act of getting f*cked
I guess we'll see. My expectations are low.
km4,
LOL!
holy smokes,
FAZ closed today at 41.60
52wk Range: 40.20 - 2,018.60
No, but C4 is a real pain to get ever since 9/11. I am not sure why...
Delaying payments by a day is an accounting gimmick.
It's pretty common practice in business, though, no?
If Wall Street gets excited by it, they've got a lot of companies to be excited about, then
Bond Girl
Looks like they'll be puttin' the squeeze on the Ratings Agencies just like they did FASBy ...
Prior to becoming SEC Chairman, she was CEO of the Financial Industry Regulatory Authority (FINRA) — the largest non-governmental regulator for all securities firms doing business with the U.S. public ~ Chairman Schapiro ...
Dinner calls. I'll list some of the tricks in 45. TTFN.
Other gimmicks: See the print in bold at the bottom of the Merc article for a summary.
Budget magicians use sleight of hand to help close California's giant deficit - San Jose Mercury News
I'll believe it when I see it. Her testimony before HFS was really weak.
How can the state government cut local government jobs?
They can change tax sharing ratios, but not directly lay off or change local union agreements.
I am most interested in the outcome.
So to summarize today:
The conclusion is obvious: The ratings agencies will overlook the $11B in return for dropping the lawsuit.
There. Do I have to solve anything else tonight?
EDIT: As I think about it, the timing of the announcement by Calpers is rather coincidental. You don't think that was the plan, do you?
From the Mercury News piece:
"Democrats then unveiled their own set of one-time maneuvers. They include a new 3 percent tax withholding for payments to independent contractors, good for $2 billion."
I predict a land rush at the Department of Corporations. Every independent contractor will need to incorporate fast.
Crisis Over.
the end.
Im callin BFF +/- at 5, helluva accident.
That lawsuit is hilarious. I highly recommend reading the text of the complaint.
Most of those gimmicks are pretty common; it's the magnitude that is shocking. But the immaculate recovery will make sure this does not blow up on them, I'm sure.
From JP's excellent Merc article
"Democrats plan to force a floor vote on their budget plan sometime this week, even though Republicans have already declared the proposal dead on arrival since it includes new taxes — on tobacco, oil production and vehicle registrations."
.
Is it groundhog day?
"I'll believe it when I see it. Her testimony before HFS was really weak."
~~~
She'll do what she is told to do ... as she is now ...
The bankstas are in charge of the gov now ...
Here is thr list, short and sweet.
Increase taxpayers" paycheck withholdings by 10 percent and accelerate estimated tax payments by individuals and corporations. The proposals don"t change how much anyone owes, but they allow the state to grab more tax revenue earlier in the fiscal year. Impact: $2.3 billion
Impose a 3 percent tax withholding for payments to independent contractors. Impact: $2 billion
Delay the June 2010 state payroll by a single day, from June 30 to July 1, thereby moving that payment into a different fiscal year. Impact: $1.2 billion
Sell a portion of the State Compensation Insurance Fund. Impact: $1 billion. (The independent Legislative Analyst"s Office called it "very unlikely" that the state would be able to pull off such a sale by next June.)
Shifting money from various accounts, such as gas taxes that are normally earmarked for transportation improvements, to boost the general operating fund. Impact: $2.5 billion
Source: Gov. Arnold Schwarzenegger, Democratic legislators
gotta go.
dont eat your eye's.
Counterpointer,
There are people who prep and then there are people who want to get really ready. Home Depot is a good start but I found a National Guard Armory that has a better selection of tools...
the timing of the announcement by Calpers is rather coincidental. You don't think that was the plan, do you?
I don't think they have a plan
oh broward, left? that aria is yet to be sung
They include a new 3 percent tax withholding for payments to independent contractors, good for $2 billion.
Wouldn't this simply result in an increase of 3% for the price quoted?
Unsurprisingly, California officials have been loud-mouthed about the rating agencies for a loooooooong time.
nova,
Unfortunately, California doesn't permit all my favorite toys. As soon as I can acquire a "get-away" farm like BSRs I may have to change principal residences just to stock up.
Who is suposed to "withhold and pay" that 3% for independent contractors?
Am I as a home owner, business owner, suposed to withhold and pay Ca gov money I owe the contractor? Just how do they think this is going to work?
TJ,
Let me know. I know a guy who knows a guy who has Barretts on sale for 30% off.
"Wouldn't this simply result in an increase of 3% for the price quoted?"
It would be easier for the I/Cs to just form an LLC. No 1099, no withholding.
Business owners are already going to pissed at having to set up for a new withholding scheme, so they will probably insist that their contractors incorporate.
"As soon as I can acquire a "get-away" farm like BSRs I may have to change principal residences just to stock up. "
Want to go in on a small ranch in Nevada?
They include a new 3 percent tax withholding for payments to independent contractors, good for $2 billion.
Wouldn't this simply result in an increase of 3% for the price quoted?
Deflation - Solved!
nova - I know claymores can't be had in the garden section, and the shopping needs to be a little further afield. Southeast, for instance.
C
So whom ever is paying the contractor has to file paperwork and send in a check?
No one and I mean no one, is going to do that.
Do people fire thier gardener?"Or the handyman fixing the sink?
C,
The Internet and Fedex solved that problem.
g'nite all
josap - I think they mean independent contractors to businesses, not your gardener.
(I am not a lawyer. I am not an accountant.)
Do all of the really little guys go out of business?
Or do they pay all the filing fees etc to turn into an LLC?
If they all become LLCs, at least the state will get some fees for name reg, filing etc.
Back during TEOTWAWKI time I took enough cash out of the bank to last a few weeks in case TSHTF. My wife ended up using the money making a killing on very high-end bathroom and kitchen fixtures at 80% off on Craigslist. People were really dumping great quality things back then.
sm_landlord,
Maybe Dawg would join us and we could get a larger one? Seriously though, it's something I've been thinking about for years now.
poic - I am SO going to remind you of that at some time in the future.
The world was about to end, it was late, so we bought fixtures...
C
Little guys will discount and take only cash, no receipts and pay zero taxes. Customers who have little money will be willing to take the chance. State can't catch them as they will be hamstrung in the cost to recover is not there. Government always shoot at sitting targets. The honest ones.
nova,
You're killing me!!!
"
poic - I am SO going to remind you of that at some time in the future.
The world was about to end, it was late, so we bought fixtures...
C
"
Well she IS Chinese. The Chinese view on the end of the world type events is never miss the opportunity to save a bunch of cash. Of course if it really was the end I would have had to figure out some way to connect a generator to my bike to power the fridge she also got the great deal on at the same time (:
YouTube - Delerium-Innocente ( Falling in love ) ft. Leigh Nash
That is all, thank you.
For now.
//Government always shoot at sitting targets. The honest ones. //
And the gov wonders why there are tax cheats LOL.
If the only way to earn a living is to keep it away from gov theft ........
Effective Demand can be our realtor. There's the occasional producing ranch coming up in my Conejo Valley area. Some at reasonable prices and water shares.
Little spread: 233 East LA LOMA Ave, Somis, CA 93066 | MLS# F1804770
Bunkerdome: Young Rd, Fillmore, CA 93015
I honestly believe we could see places like this becoming solar farms.
Whatever it is, it will be something out of left field...
US commission seeks China Xinjiang sanctions
By Shaun Tandon – 1 hour ago
WASHINGTON — The US government commission on religious freedom called for targeted sanctions against China over the ethnic unrest in the predominantly Muslim region of Xinjiang.
The US Commission on International Religious Freedom said it was "gravely concerned" about China's "repression" of the cultural and religious traditions of the Uighurs, the ethnic group native to the vast, arid Xinjiang region.
AFP: US commission seeks China Xinjiang sanctions
China blasts Turkish boycott call
Wednesday, 15 July 2009 06:57
China on Wednesday blasted a Turkish call for a boycott of Chinese goods as "irresponsible," a day after it angrily denounced accusations from Turkey that it was guilty of genocide
China blasts Turkish boycott call | TurkishNY.com
China Warns Residents In Algiers Of Terror Threat
The Chinese embassy in Algiers issued a warning to the 50,000 Chinese, who live and work in Algeria to be on alert and to take safety precautions, in response to a report that the al-Qaeda terrorist organization may target the area, reported BBC.
An al-Qaeda-linked group said that it would avenge the deaths of Muslim Uighurs that occurred during the riots in China’s Xinjiang province, reported Bloomberg.
ToTheCenter - News: China Warns Residence In Algiers Of Terror Threat
poic - LOL! I know what you mean.
nytol
C
Dawg,
Everything you could want in a place, except they're still in California. I think I'd still want at least a little hideaway in NV (or Northern AZ) just to "store" a few things.
Senate Panel OKs Health Care Reform Plan With No GOP Support
now on Huff
mmckinl,
Good take on your favorite subject:
FT.com | Willem Buiter's Maverecon | The inevitable socialisation of health care financing
As a policy wonk, I am conflicted about a constitutional convention. I am worried that it will drift off into partisan issues which have nothing to do with the budget, like gay marriage, global warming, right to work/union rules, or spaying or neutering your pet. There could also be goodness knows what commercial interest trying to do whatever about litigation rules, biotech, or drivers licenses for illegal aliens.
Still, it would be nice sequestering all state elected officials, requiring a bread and water diet, and suspending their pay if the budget is late. If it's more than 30 days late, there could be a lottery each day where several randomly chosen elected officials are prohibited from running for any office for 5 years. Oh and lobbyists can only communicate in writing to public officials if the budget is late, and all correspondence becomes public record.
OK so can someone show me how I can adjust my CA withholding now? I was thinking updating my DE-4 form; but now I will have to adjust for this 10% more in with-holding. Seriously how is that going to "fix the budget problem"? Is that on the spending side or the revenue side? Or the faux-revenue side?
F-U-CA
some investor guy,
The U.S. was intended to have a CC every 50 years or so, but you can tell how that's worked out. I just don't know how it could help but be gridlock central.
Did I miss something about a new 3% income tax on 1099s?
YLSP
You can adjust your California withholding by moving out of state. Worked for me.
So basically, as a total minority party, Republicans once again get everything they want because they simply cannot be swayed ideologically.
I don't know if I should be amazed by the unity of the Republican party or the idiocy of the Democrats. I think it's both.
TJ and The Bear
Thanks for the heads up on Buiter ...
He says single payer through government is the only way to go ...
What ever happened to Ross Perot? Maybe he's a little old to try to save CA with some well-financed ballot measures.
Steve Forbes with a flat tax? No he lives in NY.
Parker & Stone? No, they are in Colorado. They'd turn this into some kind of joke.
What's Steve Westley up to? He sounds like the kind of rich optimistic guy with experience in State government to run a convention! I met him at a conference a few months ago. He'd have us all in fast electric cars soon too.
Dammit; I think there is some problem with glossary and firefox causing firefax to run this slow...
Anyways. So they will increase your withholding and then pay you with IOUs when the budget is short again next year?
He says single payer through government is the only way to go ...
But is America ready for de jure rationing?
Why We Must Raton Health Care - NY Times
TJ, I bought one of these:
Sierra Verde Ranch Home Page
Between the well, solar power system, barbed wire fence, driveway to the top of the lot (37 acres with 300' elevation; peak at 5,900 feet; backs up to the Prescott National Forest), modest manufactured home ($75K), septic system, I'll be in at $275K. More than I thought ($200K), but prettier and more enjoyable than I thought, too.
But, it will be safe, defensible, and will support farming and ranching. And, the hunting will be great.
Ok; I figured out why this site is slow; whenever I post there is some hit to "google analytics". What the eff is that? I'm not in a good mood with this "hey we fixed the budget by magic tricks..." but I can't stay to chat much since my son is done with his bath and I need to give him some attention. I have no idea why my posts are causing my browser to hit "google analytics.com" or something like that but its some BS and I've noticed it before...
He says single payer through government is the only way to go ...
No, he said universal coverage, mandatory participation and rationing. Did you read the article?
"But is America ready for de jure rationing?"
~~~~
America is ready for rationing IF they can get decent health care at reasonable cost ...
The rich will go along because they can afford expensive treatment ...
for example Steve Jobs ...
Wow, look at all that firewood on Comrade-Dope jg's land.
Comrade jg,
WOW! That's pretty nice (and damned inexpensive too), if I do say so myself. Gotta investigate more... thanks!
TJ ...
Buiter "It only concerns who pays, and there the answer is clear: you and I as tax payers or you and I as mandated providers of subsidies in large assigned-risk pools."
through our taxes means to government ... risk pools means single payer ...
Broward,
With sincere respect for you I will believe in an upturn when you buy back in and are employed. Until then I think you are playing with the omniscient meme tracker.
What is impressive here is the big news today being a $75 billion company going bad and Ca using accounting tricks to cover the stench of insolvency. Sleight of hand is not generally perceived as real magic and making billions and billions disappear and reappear in a different column changes nothing.
Using the market as an indicator of economic health for our country is like living in Phoenix in August with your AC blasting and looking outside at 2pm and thinking it might be a good time to go for a jog.
I will agree the world has faced financial calamity time and again. Once again I'm staking my impression of worse to come on the environment, water and food supplies, oil dependence and much posturing bordering on active engagement between several nuclear armed regimes.
Looking back at WWI and the run up to the world wide depression was the tranquility of 40 years of peace with London playing the center of the financial world. The widely accepted thesis was war was such an economic disaster for the world that the prolonged prosperity made maintaining the status quo a guarantee against war. Look up Norman Angell, "Europe's Optical Illusion", for this thesis that made the rounds among the elites of the time. Politicians espoused the ideas and over 40 organizations were created to spread the word. Somehow all that marketing failed with a single shot paving the way for two wars and the transition of the Brits to the US as the world power.
I do not believe any major shift from West to East can be accomplished without some catastrophic struggles.
FYI on CA income tax collections...
Starting in tax year 2009, anyone paying quarterly estimated taxes to CA was expected/required to pay 30%/30%/20%/20% by quarter rather than 25% each quarter. Failing to do so will result in a penalty.
Based on current revenue flow, looks like not many got the message.
TJ, if you are trying to be economical (I was), just don't pick something at high elevation or with a big increase in elevation. My well is going to cost me $35-50K, probably, between the drilling, pumping equipment, and solar power source. The damned driveway to the top is $11K.
But, I will have a beautiful field of view of any and all bad guys coming my way.
Should be few, as the lot is at the end of two miles of paved road followed by eight miles of unpaved road.
Great place to hideout. Won't be so great for my teenage daughter and teenage son, though!
TJ and The Bear (profile) wrote on Wed, 7/15/2009 - 10:47 pm reply Ignore user sm_landlord,
Maybe Dawg would join us and we could get a larger one? Seriously though, it's something I've been thinking about for years now.
LandsofAmerica.com - Land for sale by Villa Grove, Colorado - Saguache County - 1615 acres
How about this one? It's not Nevada, but it's a cute little place.
I've had my eye on it. From afar of course.
Comrade-Dope jg , yep - your kids are going to be very unhappy. And they will then make you very unhappy. I hope they are close to 18, for your sake.
Yes, they will be unhappy, initially, as will be my wife.
But, as we are listening in on the mayhem in La Jolla via shortwave, as the Mexican druglords and San Diego gangs run amok after the San Diego police department quits showing up after getting 'paid' via IOUs, they will all get over it.
Outsider
Farms and ranches look great in spring ...
Let's see the winter pictures ...
Outsider
Farms and ranches look great in spring ...
Let's see the winter pictures ...
Outsider
Farms and ranches look great in spring ...
Let's see the winter pictures ...
apologies for the triple post
this system is really backing up
jg - What happened to your Maine idea?
From where I sit, (New Mexico) those plots of land look pretty, but VERY expensive. I met one of the "Good Old Boys" who had been selling land in southern Colorado for years. He bought large plots, subdivided, and sold on terms. His purchase rule was the price of the land had to be less than one third of the net present value of the note he sold it on, discounted to yield 18%.
There are lots of dead subdivisions all over the southwest with owners scattered around the world. Tax records may let you track them down to find a real deal.
nite
Winter is when you have a big truck and a snow plow.
I lived outside of Flagstaff, on a dirt road, for 7 yrs. The only way out in the winter was with the plow. We hauled water and used wood for heat. Not a bad life, but it was allot of work.
TJ,
Be sure to investigate the tax picture.
And no, I am not kidding.
Outsider, fine memory you have.
Maine was too far for a quick, easy exit when hell breaks loose in SoCal. Beautiful country, but we'd have to abandon ship at the first whiff of unrest, to make it across country with the last of our belongings.
My wife wants to keep things normal -- kids in school, etc. -- as long as possible.
The Northern Arizona 'Doomstead' is only 450 miles away, an easy seven/eight hour drive. So, I'll be able to get it up and running until Armageddon arrives, then -- ideally/theoretically -- bug out at the last minute.
sm_landlord,
Yeah, that was my very next question. What I'd like to do and what I can do (at the moment) are two very different things, too, so I'm in no real rush.
Comrade jg,
I know how to run most forms of heavy equipment myself, so that'd help with keeping costs down.
Outsider, fine memory you have.
I'm a stone's throw from Maine, so not hard to remember. I wondered how that trip was going to turn out for you.
TJ, if you have that skillset, you could probably build a nice log cabin, instead of buying a ready-built home, install your fence, build your driveway and septic system, etc.
30%/30%/20%/20% by quarter
One of the most pathetic schemes so far.
Why not make it 100%/0%/0%/0% and then have pre-pay into the next year, and the next.
Outsider: You in NH? Anywhere near the White Mountains?
JP - I was near the White Mountains, but had to move further south to keep the kids happy. Too rural for them.
You guys are all crazy - if you are going 'native' and are looking at farms - focus on productivity not beauty. My father took the train from Minneapolis to Seattle then down to San Diego then back home to Minnie through northern AZ and Colorado... that was in 1938. He had family on the west coast and his father [my grandfather] worked for the railroad so had all but free passes... he was 17.
The kid he made the trip with came from a farm - my father from 'town'. My father said he was amazed at the beauty of the west would go on and on about it... his friend said it all looked the same to him... like hunger [outside of the Columbia Valley and Cali Central Valley which had 'real farms']. His friend said the most beautiful part of the trip... Iowa & Southern Minnesota... plenty of water without irrigation and fertile top soil 6-8 feet deep everywhere. Even harsh winters are your friend - kill many of the worst insect pests.
If you got tons of money - those hardscrabble acres are great... if not stick to the city or buy a real farm.
Just saying.
I might have to drive around and take pictures of what real land looks like - blow you all away.
One of the most pathetic schemes so far.
Why not make it 100%/0%/0%/0% and then have pre-pay into the next year, and the next.
When we tax preparation volunteers were first told this, our inital expectation was that it would be 30%/30%/30%/30% ; )
dryfly,
Yeah, I know what "real land" looks like. Can't afford that!
What does real land look like? Do you mean water supply? Are you talking flatlands?
You guys are all crazy
Said dryfly as he drove past the drug warlords of Mexico.
Real land, what is left and not built over, in Az is the Verde Valley.
Good soil, good water not too deep, No snow, decent summers. Expensive now though.
Comrade jg,
I've done all those things before; seems like my dad had us build everything growing up. I'd rather pay for skills better than mine, but they do come in handy for some things.
dryfly, I just need a half acre for a garden and a few acres for some chickens and a miniature Jersey or two Nubian goats.
More importantly, the place has to be difficult for bad guys to reach: 100 miles+ from a large city.
Lots of good places in Idaho, Montana, Wyoming, Upper Peninsula Michigan, etc. And, I lived in MN for four years and thoroughly enjoyed it.
But, for family (i.e., wife) tranquility -- easy, quick bug out at the last minute -- during the remaining weeks/months of peace in SoCal , I need something close, hence, northern Arizona.
My dad's dad left the farm (in Kansas) in the late 30s to weld ships in Long Beach. My dad was left behind to sell the farm. He ended up in Long Beach after the farm was gone and started college there, ending up with a couple of degrees from Berkeley.
The idea of going back to the farm is not all that distant to me.
you guys are seriously sentimental this evening. being a farmer sucks. it is incredibly hard work. foot and mouth disease? no thanks.
::eyeroll::
Fine upbringing you had then, TJ.
sm_l, initially, my wife said, 'But my Mom left the farm in Iowa. No way am I going back to a farm or ranch.'
Now, she's onboard with waiting out the unrest on The Doomstead. She thinks such will last weeks or a few months, max.
Me, I think it will last years.
Sure, farming sucks.
But if I can afford to buy a ranch in a tax-friendly state, why not?
I don't need it to produce anything. It just has to exist to justify its existence, if you know what I mean.
. being a farmer sucks. it is incredibly hard work
Ahhh, how sad.
Post-Boomer Man has deteriorated from too much air-conditioning, foosball and free cokes.
What does real land look like? Do you mean water supply? Are you talking flatlands?
Carl Sandburg described it once as 'earth so good it looks like you could eat it without passing plants through it first'...
I had a girl friend who grew up in north Alabama - raised on red clay played out 100 years before her mother was born [1930s]... she saw my parents garden in S Minnesota and couldn't believe land was that good - top soil that deep - anywhere left in America.
And it is still out there though we are doing everything in our power to destroy it.
Just gotta look...
Do any of you guys know how to butcher a hog or remove feathers from a chicken?
Keeping the weeds and wild animals out of the garden is a daily fight.
Life on a ranch / farm is not easy. You get up early and go to bed late. There are always 6 more things that need to be done.
Said dryfly as he drove past the drug warlords of Mexico.
WORD!!! [LOL]
josap, I read Joel Salatin (Salad Bar Beef, You Can Farm). He says he has long days during haying season, but that life is slow and good in the winter. I vaguely remember that he accomplishes his tough chores in a few hours daily.
Seems like a good life.
Especially in comparison to my 6:30 a.m. to 6:30 p.m. days stuck inside, non-stop, in an office.
foosball also resembles work too closely for me to want to be involved
. being a farmer sucks. it is incredibly hard work
It's good for those who like hard work.
As an example: My FIL is proof that medical science is incomplete about cholesterol; He has 2 hamburgers for breakfast and is in good shape @ 70. One day, I went out to help him feed the cattle, and I had my normal bowl of cereal. When I came back in for lunch, I was ready to eat a horse.
And I can't imagine what life was like before the tractor, which did most of the real work.
I had a great garden in western NC in that clay -- just had to work it, that's all. Pretty much anything is improvable.
Including these darn boulders. Next year's project.
vineyards in the columbia valley doesn't sound bad. just don't expect me to pick anything.
So Outsider: What is the housing market like in southern NH? I track CT and Boston to some degree, but I have no idea about NH. Did they have Boston-sized bubbles?
Let me know. I know a guy who knows a guy who has Barretts on sale for 30% off.
CIT Talks Fall Apart, Bankruptcy Filing Likely Friday
CIT Group, is likely to file for bankruptcy Friday, a source close to the company tells CNBC. The major lender to small-and mid-sized U.S. businesses had been surprised at the failure of bailout talks.
CIT is now pursuing a plan that is likely to include a chapter 11 filing on Friday.