• 1) Illinois seeks federal backing for pension bonds

“Illinois faces a huge unfunded pension liability of at least $55 billion even after the state sold $10 billion of taxable pension bonds in 2003 to ease that liability.”

• 2) Groups Join To Protect Pension System From Major Changes (Vermont)

“A special commission is meeting this fall to look at this issue because it’s estimated that Vermont has a one billion dollar unfunded liability in its retirement programs for state employees and teachers.

Here’s the problem - 25% of all state workers and teachers will be eligible for retirement in the next 5 years but the Retirement Funds have lost a significant amount of their value during the recession.”

• 3) Freddie Mac Defaults Set Record as Holdings Rise

“Oct. 23 (Bloomberg) — Freddie Mac, the mortgage-finance company under government control, said defaults among its loans again set a record last month, while its portfolio of residential assets grew at an annualized rate of 7.3 percent.”

• 4) Joyce warns of bigger GFC

“In unusually pessimistic comments for a senior political figure, Senator Joyce said the US Government was running such large deficits and building up so much debt that it was in a similar position to Iceland or Germany before World War II.

In a Senate estimates hearing on Wednesday night, he asked Treasury secretary Ken Henry what would be the implications of an American debt default for the Australian economy.”

• 5) California College Classes Cancelled Due to Furlough

“The California state budget crisis is so severe that campuses in the California State University system are canceling midweek classes to give faculty a three-day furlough, the Los Angeles Times reports. At Cal State Fullerton, one student said that “On Monday, the chemistry teacher told us that we’re going to have to learn a whole chapter on our own” because of the furlough. “I could tell he felt bad. He felt frustrated.”

The University of California, meanwhile, is dealing with its own budget woes. Even after cutting staff and raising student fees, the university system faces a $550 million budget deficit.”

• 6) Monetary Base jumps even higher (Graph and number from St. Louis Fed)
• 7) Jefferson County news keeps getting worse

“More deals followed as Jefferson County sold and refinanced additional bonds to repair and expand its sewer system, enough to reap Blount Parrish $7.1 million for its advice and ex­pertise on organizing and selling public debt securities that wound up being bought by investors. That debt has now ballooned to $3.9 bil­lion, is in default, and has Jefferson County teetering on what would be the larg­est municipal bankruptcy in U.S. history”

• Arizona budget shortfall projection reaches $2B

“PHOENIX — Legislative budget analysts raised their estimate of Arizona’s midyear budget shortfall to nearly $2 billion, up from approximately $1.5 billion. The growing shortfall, roughly a fifth of the budget, prompted calls to cut spending, increase taxes and raid voter-mandated programs.”

• 9) Delay in pay cuts costs Miami-Dade millions every week

“As each week passes without the promised cuts, the county’s deficit grows by another $4 million, according to Mayor Carlos Alvarez.”