Important News - Nov. 08
By Daniel at 8 November, 2009, 1:24 pm
***National Debt Clock now says $12 Trillion***
The other National Debt Clock is close to $12 Trillion
Those commercial banks are JP Morgan (JPM), Goldman Sachs (GS), Bank of America (BAC), Citi (C) and Wells Fargo (WFC).
- 2) Default notices rising in upper echelon ZIPs (San Francisco area)
“In upscale communities such as Los Altos, Greenbrae and Alamo, where median prices top $1 million, about twice as many households received default notices from January to September as in the same period in 2008, according to recorders’ office data compiled by MDA DataQuick, a San Diego real estate research firm.
The same is true for mid-scale areas with median prices around $500,000, such as Walnut Creek, Los Gatos and Campbell.”
2A) Web of foreclosure spreads in Marin
“Ludwig von Mises was snubbed by economists world-wide as he warned of a credit crisis in the 1920s. We ignore the great Austrian at our peril today.”
“Ordinarily, any random spikes in credit would be quickly absorbed by the system—the pricing errors corrected, the half-baked investments liquidated, like a supple tree yielding to the wind and then returning. But when the government holds rates artificially low in order to feed ever higher capital investment in otherwise unsound, unsustainable businesses, it creates the conditions for a crash. Everyone looks smart for a while, but eventually the whole monstrosity collapses under its own weight through a credit contraction or, worse, a banking collapse.”
“San Diego is facing a $179 million deficit in its city budget next year, a shortfall that Mayor Jerry Sanders blames primarily on the economy but critics say was worsened by increased city spending on his watch.”
“Steve Francis, who ran against Sanders for mayor last year, said the city should have kept its budget frozen since 2005 until it resolved its $1 billion-plus pension deficit and fiscal woes.
“They let the expenses continue to rise, and now with the economic downturn, we have basically a tsunami,” Francis said. “If they had done the heavy lifting early on, the dramatic cuts that are going to take place now would not have been so bad, and they may have also had a little wiggle room.””
“Gov.-elect Chris Christie shifted into governing mode this week as the glow of election victory dissipated quickly.
The news came quickly that state revenue numbers continue to fall. So Gov. Jon Corzine ordered $400 million cut from the current state budget, double the amount announced in October.
Meanwhile, an $8 billion or more budget hole still looms for fiscal year 2011, which starts in July, and the Superfund that pays for the state’s highway and transportation construction projects is expected to run out of available money by the end of next year.
That’s not to mention state unemployment near double digits or the upward of $100 billion in debt and unfunded pension and health-care obligations.”
“Welcome to another public pension fiasco. The state’s unfunded pension liability plus its other pension debt will total $95 billion by the end of the fiscal year. That’s north of $7,000 for each of Illinois’ 12.9 million residents — including babies, retirees … and the state lawmakers who created this travesty. Gov. Quinn and legislators: You can’t afford to ignore this problem any longer.”
“Statewide beer sales were down 3.3 percent for the first nine months of 2009, said Pat Higgins, owner of Orrison Beverage Company in Cheyenne, quoting from a new report last week.
Higgins believes the decline correlates with the exodus of oil and gas field workers, a hard-working, hard-drinking, well-paid bunch.
Beer sellers in Carbon County and the western part of Wyoming are feeling the drop the most, he said.
The slump also extends to liquor and wine sales.
Greg Cook, director of the Wyoming Liquor Division, said sales statewide dropped 2.23 percent between May 1 and October 31.
This decrease reverses a previous trend of 2 and 3 percent increases.
“You are seeing people trading down to less expensive brands,” Cook said.”
“People have read plenty about the effect of the national recession and the market on state revenues, particularly mineral income.
The state alone has lost about $1 billion in expected dollars over the past year. The local governments are getting pinched on sales tax income.”
It hurts more to be unemployed now than the last time the jobless rate hit 10 percent. Americans have more than triple the debt they had in 1982, and less than half the savings. They spend 10 weeks longer off the job.
“From 2001 to 2008, the town’s annual contributions to cover its pension obligations more than tripled, from $2.2 million to $7.5 million. The trend is expected to continue in the next decade, Finance Director Jane Struder said. Depending on market developments, one analysis shows the town’s annual costs could double in five years, and drive the operating budget, currently at $67 million, into deficit as early as 2012.”
“The council is reviewing a consultant’s report on ways to cut pension costs and plans a meeting on Dec. 3.
“Even if we raise taxes to the legal limit [set by the state legislature], the way the projections are currently coming out, we still wouldn’t have enough money to fund town operations and meet the pension obligations going forward,” Councilman Robert Wildrick said.”
“The state’s contribution to the teachers’ pension fund has risen 70 percent in the past five years, from $24.4 million to $41.5 million. Next year, the bill is expected to hit $63.5 million as the General Fund faces an $85 million drop in revenues.
The problem goes beyond benefits for teachers.
Spaulding projects Vermont will see the benefits payout for state employees and teachers hit $255.8 million in five years, compared with $172 million this year. To keep up, the state must put more money toward retiree benefits each year. The combined state pension contribution for last year was $66.3 million, or 5.5 percent of General Fund revenues, and rises to $73.5 million, or 7.1 percent, for the current year. By fiscal year 2011, the state contribution is projected to hit $103 million, or about 9.5 percent of General Fund revenues.
That’s a whole lot of money unavailable for everything else state government is supposed to do, from fixing roads to paying state troopers to looking after the welfare of Vermonters unable to care for themselves.
This is clearly an unsustainable scenario.”
“SHARM EL-SHEIKH, Egypt (Reuters) - China hopes that the United States will keep its deficit to an appropriate size to ensure basic stability in the U.S. dollar exchange rate, Chinese Premier Wen Jiabao said on Sunday.
“I hope that as the largest economy in the world and an issuing country of a major reserve currency, the United States will effectively discharge its responsibilities,” Wen told a news conference in Egypt.
“Most importantly, we hope the United States will keep an appropriate size to its deficit so that there will be basic stability in the exchange rate, and that is conducive to stability and the recovery of the global economy,” he added.
The premier had expressed concern in March that massive U.S. deficit spending and near-zero interest rates would erode the value of China’s huge U.S. bond holdings.”
……….The future of China’s U.S. bond holdings.
11) Public Pensions Face Ugly Choices…Bankruptcy, taxpayer bailouts appear inevitable
States and municipalities are in deep financial trouble. Pension performance has faltered. Over a trillion dollars worth of municipal pension fund assets have been erased in the recent market meltdown. The average public pension plan is 35% under-funded, and things are getting worse. A wave of municipal bankruptcies could well follow.”
- Saxplayer00o1
No comments yet.