Dow below 9000 = Are the kikes jumping out windows yet?

[Joe_J.]

[COLOR=#333333 ! important]Instead of working longer as the economy worsens, more Americans are calling it quits before age 66. The ramifications could be profound for the retirees, families, government and social institutions.[/COLOR]
[COLOR=#999999 ! important]By Mike Dorning
May 24, 2009 [/COLOR]
Many of the additional retirements are probably laid-off workers who are claiming Social Security early, despite reduced benefits, because they are under immediate financial pressure, Goss and other analysts believe.

The numbers upend expectations that older Americans who sustained financial losses in the recession would work longer to rebuild their nest eggs. In a December poll sponsored by CareerBuilder, 60% of workers older than 60 said they planned to postpone retirement.

Goss said it remained unclear whether the uptick in retirements would accelerate or abate in the months ahead. But another wave of older workers may opt for early retirement when they exhaust unemployment benefits late this year or early in 2010, he noted.


The ramifications of the trend are profound for the new retirees, their families, the government and other social institutions that may be called upon to help support them.

On top of savings ravaged by the stock market decline and the loss of home equity, many retirees now must make do with Social Security benefits reduced by as much as 25% if they retire at age 62 instead of 66.

"When the recession ends and the economy bounces back, there may be a band of people for whom things will never be the same again. They'll still be paying the price for 10, 20, 30 years down the road," said Cristina Martin Firvida, director of economic security for AARP, the nation's largest membership organization for people 50 and older.

The most severe effect will probably fall on the unemployed widows of workers who retire early, Munnell said. Survivors' benefits also take a deeper cut when people retire early -- reduced as much as 30% for retirement at 62. Because women tend to live longer than men, that leaves them more vulnerable to running out of money as expenses for assisted living and other costs rise in advanced old age.

Significant numbers of workers have long chosen to retire early. In 2007, the most recent year for which statistics are available, 42% of men and 48% of women began collecting Social Security retirement benefits at age 62, the first year of eligibility.

http://www.latimes.com/news/nationwo...0,885521.story

[Joe_J.]

China warns Federal Reserve over 'printing money'
China has warned a top member of the US Federal Reserve that it is increasingly disturbed by the Fed's direct purchase of US Treasury bonds.

By Ambrose Evans-Pritchard
Last Updated: 9:19PM BST 24 May 2009

Asia's "Confucian" culture of right action does not look kindly on the insouciant policy of printing money by Anglo-Saxons
Richard Fisher, president of the Dallas Federal Reserve Bank, said: "Senior officials of the Chinese government grilled me about whether or not we are going to monetise the actions of our legislature."
"I must have been asked about that a hundred times in China. I was asked at every single meeting about our purchases of Treasuries. That seemed to be the principal preoccupation of those that were invested with their surpluses mostly in the United States," he told the Wall Street Journal.

http://www.telegraph.co.uk/finance/f...ing-money.html

Obamarket Update #84 for the Week Ending 5/22: Beating our Currency Like a Baby Seal

What a week, where we heard such insanity as:

Analysts say GM bankruptcy may not be all that bad

In my brief blogging career, well, I don’t get paid so let’s call it “era” instead, I have made some pretty outrageous statements. The Ministry of Peace from Orwell’s 1984 could not have come up with a headline as stupid and blatantly false. These idiots are trying to convince retirees and investors who are about to have their Constitutional rights usurped, again, for the umpteenth time since the Messiah was elected, that a General Motors bankruptcy will not be all that bad and in fact would be beneficial for their future.
You’re kidding me, right?
A company, the second largest auto maker in the world, which employees tens of thousands of people, has thousands of suppliers, trucking companies and dealers dependent on their products; dependent retirees who invested in their common stock, preferred stock and bonds; municipalities, counties and states along with unions and pension plans who bought their corporate bonds and preferred stocks also, are all being told by a bunch of “analysts” that a GM bankruptcy will not be that bad. So the eighty year old man who was dependent on the regular payments from his GM corporate bonds that now has to compete against the other 10% plus of people in his community for that bag boy job at the local grocery store is being told this is not that bad.
The grandmother who now has to decide if the Friskies Beef and Chicken meal will be for her cats or herself is being told that a “GM bankruptcy may not be all that bad.”
The real estate market which has been shredded like a Canadian goose hitting the turbofans on an outbound U.S. Air jet is being told it “may not be all that bad” as former GM employees, supplier employees, and retirees dump their vacation homes, time shares and other properties on the market to survive.
The employees who think that the government knows what they are doing is being told “don’t worry be union happy” and that there is nothing to fear since the Messiah is the new CEO are freaking out and wisely so.
Yet it may not be all that bad. When I post the GM bankruptcy update thread next weekend I just want you to remember where you heard the following here first:
There will be a massive increase in senior citizen suicides as a consequence of the shabby treatment stock and bond holders will receive from this government due to a General Motors bankruptcy filing.
You heard that here first, remember that dire and sad prediction.
Beating the Dollar like a Baby Seal
While all of the major discussions this week have been on green shoots from the marijuana crop coming in at CNBC, the reality of what the rest of the world feels about the U.S. dollar is starting to have an impact. Last we heard when the “end of the end of the bear market” rally began in March and April, the U.S. dollar index was in the mid 80’s and looking to move higher as the rest of the world had a sudden and restored faith in the future of our nation because that smile from Obama just means jobs will be growing on a daily basis once he is through nationalizing every damned thing that is in this nation.
The reality is that all that crap paper was denominated in dollars and when the foreign investors looked to liquidate their holdings in such beautiful things like some Countrywide or Merrill Lynch ABS or MBS. The Markit ABX indexes (remember, those graphs everyone freaked out about last year on Bubblevision and now that they are bouncing off historic lows are ignored?) like this one from the 2006 series A-rated (Designation ABX.HE.A.06-02) has rallied all the way up to a price of 3.48. Of course that is after an all time high of 100.12 but who cares, happy days are here again.

Woo-hoo! In reality though the dire situation involving the dollar is that many nations and investors have successfully divested themeselves of enough of the crap paper we have issued them to the point where they are no longer facing life or death market situations if they do not have to acquire U.S. dollars and use them in their day to day transactions to reach closure. In Australia this week a milestone piece of news, ignored by 99.99% of the world, snuck through Reuters where the headline said it all:

Rest at the link at the top.

YouTube - Hyperinflation

YouTube - Hyperinflation

http://www.usdebtclock.org/

[Joe_J.]

NO NEW LEASE ON TRILLIONS IN DEBT
By MARK DeCAMBRE

May 24, 2009 --
A trillion-dollar storm is gathering over the commercial real estate landscape that's threatening to add further pain to an already bruised US economy.

At the center of the worries is some $3.5 trillion in debt backed by everything from strip malls to offices and apartments across the nation -- the lion's share of which is badly underwater because this recession followed a five-year commercial property boom fueled by easy money and loose underwriting standards.

Now the owners of the less-than-full malls, apartment complexes and office buildings are succumbing to the worst economic collapse since the Great Depression -- because they can't refinance the debt.

The commercial debt securitization market is dead.

"Because there is no securitization the system cannot process the wave of maturities coming due," said Scott Latham, commercial property broker at Cushman & Wakefield.

"This is arguably the most important fact we're going to be dealing with. If there's no mortgage market that can feed the machine you're just not going to have deals," he said. "It's going to be years before we recover and even when that happens we're going to discover that we're in a new paradigm," Latham added.

About $1.4 trillion in real estate debt is set to mature over the next four years, with some $204 billion coming due this year alone.

Most of that debt won't be able to be refinanced or restructured because lending standards have tightened and commercial real estate values have cratered since last year, according to Deutsche Bank analyst Richard Parkus.

The debt behind the commercial real estate boom, commercial mortgage-backed securities, or CMBS, entails pooling together commercial mortgages in apartment buildings, shopping malls or trophy offices in different locations, packaging them into bonds and selling them to investors.

CMBS issuance reached its peak with $230 billion transactions completed in 2007. Last year, as the market was dying, a relatively anemic $12 billion in activity was seen, according to industry newsletter Commercial Mortgage Alert.

The last time the markets saw a tsunami like this one was in the late 1980s during the savings and loan crisis, when builders overwhelmed the markets with commercial supply that went vacant for years.

However, this commercial real estate crisis, fueled primarily by developers and property investors getting easy access to relatively cheap loans, may be even worse than what's come before. That's especially the case since Average Joes and Janes are by extension huge landlords via pensions, endowments and mutual funds -- which have big commercial property exposure over the past few years.

Broadly speaking, commercial real estate values are off by as much as 40 or 50 percent by some estimates.

C&W's Latham also points out that some loan agreements with bank lenders stipulate that properties have to be rented at a certain dollar amount or run into technical default.

"Many of these loans don't live long enough [to refinance]," Parkus told The Post. The research analyst plans on submitting a more comprehensive commercial real estate report as a follow-up to his popular report next week that's even grimmer than his original.

According to C&W, Manhattan vacancies jumped 20 percent in the first quarter from three months earlier, with Midtown seeing a 24 percent vacancy rate.

"There's going to be a lot of pain," Anton commented. Here is how the commercial real estate crunch is affecting three companies:

* Broadway Partners

Take the case of Scott Lawlor, who is struggling to keep a $14 billion assemblage of the nation's choicest properties he owns via real estate fund Broadway Partners from falling into the hands of his lenders -- or worse, having to file for bankruptcy.

Recently, a consortium of lenders foreclosed on Lawlor's John Hancock Tower -- a trophy Boston office building. The $660 million the building fetched at auctioned when sold by Lawlor's creditors represented half the amount Lawlor's fund paid for it in 2006.

It serves as a haunting experience for the son of a Queens cab driver who in rapid-fire fashion in less than five years grew his firm from a few small office buildings in Philadelphia and New York into a billion-dollar empire spanning the nation. He did it on the back of leverage.

As it stands, Lawlor is fighting to restructure much of the debt he borrowed to fund his buying spree in the hopes of weathering the real estate storm. Sources told The Post that the Broadway CEO is currently in talks to recast a block of offices acquired from real estate fund Beacon Capital Partners and financed by the defunct Lehman Brothers.

Privately, Lawlor has told peers that he believes that he may lose one or two more properties to foreclosure but expects to maintain the bulk of his multi-million square foot office portfolio. A spokesman for Broadway declined comment.

* Tishman Speyer

Sources tell The Post that the sprawling 80-acre Stuyvesant Town-Peter Cooper Village apartment complex that Tishman Speyer acquired with its partners three years ago for $5.4 billion may end up in lenders' hands after cash reserves for the residential complex run dry.

And that's not the only asset on which the company is feeling the pinch. Tishman bought for about $21 billion on leverage the real estate investment trust Archstone-Smith at the height of the market.

Tishman's Archstone purchase loaded the REIT up with massive debts, and lenders are believed to have been forced to place about $1 billion more into the company in order to keep it afloat.

Tishman officials have argued that they're not taking as big a hit on its investments as one might believe because it never put that much equity at risk. Tishman put about $250 million into its investment in Stuy-Town and about $112 million in Archstone, sources said. A spokesman for Tishman declined to comment.

* General Growth

Properties

So far the biggest commercial real estate blow up has been that of REIT General Growth Properties Trust, the second-biggest owner of shopping malls throughout the US. It filed for bankruptcy protection last month.

Like many of the commercial real estate investors, GGP ballooned in size by using leverage to scoop up a raft of malls in the early-2000s as choice, rarely sold mall jewels that hit the market.

GGP used billions in CMBS debt to fund its acQuisitions, but as retailers got slammed and the economy spiraled into recession so it couldn't keep up with its payments.

In fact, GGP's collapse into bankruptcy is testing the bounds of the laws that govern which debtholders get what when companies fall into Chapter 11.

As a holding company, GGP has filed for bankRuptcy, but it has many so-called special purpose entities that represent the individual malls it owns under the GGP umbrella.

Debtholders of those CMBS bonds had always thought that in a bankruptcy their ownership would be insulated from getting whacked -- but now they're not so sure.

So far instances like GGP, Tishman and Broadway have been treated as one-offs but there are already signs that a wave of such problem property situations is waiting in the wings.

In total, more than 4,500 properties are on the brink of default, representing some $95 billion in assets in the US, according to Real Capital Analytics.

At this point, it's hard to determine how the commercial real estate problem will resolve itself but it's expected that banks may suffer losses of $200 billion with regional banks being slammed the worst.

Case 1

Broadway Partners

$14 billion in property under management

Office assets +17 million sq. ft.

CEO: Scott Lawlor

Speed bump: Bought Boston's John Hancock Tower for $1.3B in 2006 near market peak; forced sale for $660K last month.

Case 2

General Growth Properties

Over 200 US malls with 200 million sq. ft. in retail space.

Chairman: John Bucksbaum

Speed bump: Couldn't pay debt due on 2004 purchase of Rouse Co. for $12 billion - and couldn't refinance it.

Case 3

Tishman Speyer

92,000 apartments with 115 million sq. ft. rental properties

Chairman: Robert Tishman

Speed bump: Bought Stuy-Town for $5.2B in 2006; operating cash will only last to 2010; unable to refinance.


http://www.nypost.com/seven/05242009...812.htm?page=0

[Joe_J.]

WASHINGTON (MarketWatch) - The Federal Reserve's actions in the financial market crisis, hailed by many as critical to the fading of systemic risks in recent months, have increased the chances that the central bank will face its most sweeping -- and from the Fed's point of view mostly unwanted -- reforms ever. "Congress can't figure out what it is mad about with the Fed, but it is mad about something," said Fed watcher David Jones.

Congress looks likely to open up the Federal Reserve Act and change some of the operating procedures of the bank for the first time in its almost 100-year history. Many of the regulatory powers amassed by former Fed Chairman Alan Greenspan, a consummate bureaucratic in-fighter, could be stripped away. For the first time, the 12 regional Fed bank presidents could face Senate confirmation, experts say.

But Fed insiders are most concerned that there might be last-minute changes. "For the last 35 years, all manner of ideas have gotten shot down on the grounds that the last thing we really want to do is open the Federal Reserve Act to mischief," said James F. Smith, chief economist at Parsec Financial Management Inc. and a long-time Fed watcher.

In public, Fed officials don't share these concerns. They clearly have high hopes for the bank in the coming debate over how Washington regulates Wall Street. The Fed appears to want broad new powers to examine any and all "systemic risk" issues facing the markets. And the Fed has asked for power to issue its own debt for the first time. But these hopes appear in jeopardy.

http://www.marketwatch.com/story/fed...eeping-reforms

[The Bobster]

http://blog.vdare.com/

26 May 2009

WSJ Crows: “Refugees” get scarce jobs ahead of Americans.

By Patrick Cleburne

The Wall Street Journal is famously schizoid

Peter Brimelow noted here in Wall Street Journal Concedes: Immigration Depresses Wages!

the news pages are written by conventional liberal media Democrats. The Editorial Page, once controlled by conservative Republicans, is now a stronghold of Neoconservatism (a very different thing).

His point was that sometimes

some vague memory of the days when liberals cared about workers

caused the appearance of stories like the one he discussed, documenting the damage done to the American worker by unrestrained mass immigration.

The WSJ Editorial Page remains solidly in the grip of the Neos, of course, but worker-sympathy amongst the news writers is now rare – unless the workers are third world immigrants.

Job Fight: Immigrants vs. Locals
Tennessee Residents Compete for Work They Once Scorned; An All-Night Wait for Slaughterhouse Shifts
By Miriam Jordan The Wall Street Journal May 26th 2009

seems in fact to take a certain amount of pleasure in recounting how economic collapse has brought skilled American workers to the gates of a Tyson Chicken plant hunting for arduous unskilled $9.85 an hour jobs, (a scene reproduced elsewhere):

Mr. South made $26 an hour as a bricklayer before losing his job in October, he said. Because he was self-employed, he couldn’t collect unemployment insurance and soon lost his home…”Man, I’m staying in line all night for this job,” said Mr. Eady, 45, an out-of-work trucker who said he’s been checking almost daily with the employment office about the next Tyson call. “I gotta eat, and I got a three-year-old son.”… Outside Phoenix, a metropolis that helped define the recent building boom, college-educated Americans are applying for jobs at the JBS SA beef-processing plant, says human resources vice president Bob Daubenspeck….

Jordan’s story begins and ends with sensitive portrayals of - the immigrants involved.

The problem the Americans faced: ferocious well-organized competition from squads of immigrants, many of them recently-arrived “Refugees”.

Burmese refugee Cho Aye traveled 60 miles from Nashville on a Thursday morning in late March to take a place at the head of the line outside Shelbyville’s state employment office. The next day, the office was to take applications for $9.35-an-hour jobs processing chicken at the local Tyson Foods plant. Directly behind Ms. Aye, sitting on blankets atop the concrete, were 16 more Burmese refugees…Groups of immigrants began arriving in vans as early as 8 a.m. the day before — first Ms. Aye and the 16 other Burmese, followed by Egyptians and Africans.

(Burma! What debt do Americans owe utterly alien Burma? The Refugee Industry has become as brutal an attack on the American worker as the illegal influx. To its credit, the local Shebyville Times-Gazette realises this.)

Well before the state-run agency opened that morning, officials from churches and refugee resettlement agencies had transported several vanloads of Asian and African applicants from Nashville. An Egyptian minister ferried a group of congregants from a Coptic Christian church.

Much to the outrage of the native Tennesseans, Tyson says it cannot discriminate in their favor (which is probably true – although Tyson is no Teddy Bear).

The result: Tyson hired 51 applicants including 14 of the Burmese. Mr. Smith referred to above was also hired, but, Jordan cheerfully points out, was dismissed a few days later for flunking a drug test.

VDARE.com knows Miriam Jordan and her drum roll of pro- immigration stories at the WSJ all too well. In fact, she won Joe Guzzardi’s 2008 Worst immigration Reporter Award.

I see she was educated at Stanford and Columbia and speaks several languages including Hebrew.

Ask Miriam Jordan can she speak - or feel - American?

[Joe_J.]

NEW YORK, May 26 (Reuters) - General Motors Corp's (GM.N) offer to exchange shares in the reorganized company for $27 billion in bond debt has met with a tepid response from investors, sources familiar with the process said on Tuesday.
GM bondholders have only tendered a low single-digit percentage of the total debt available, the people said, asking not to be named because details of the exchange are not public.
GM has said it could be forced to file for bankruptcy if it cannot retire 90 percent -- or $24 billion -- of its bond debt in the exchange offer that expires just before midnight.

http://www.reuters.com/article/rbssC...48146320090526

[Hugo Böse]

So the DOW is up again by 200 points because somebody claimed the dumb assed consumers feel more confident. This can´t be over so easily, so painlessly, as far as I know none of the problems have been fixed, none of the excessive debt amongst citizens, corporations and government has been reduced, there has not been any reindustrialization, there is no new internet boom around the corner, massive government spending and forced investment in eco shit can´t fix these problems.

http://money.cnn.com/2009/05/26/mark...ion=2009052617

[Kievsky]

Originally Posted by Right is Right

So the DOW is up again by 200 points because somebody claimed the dumb assed consumers feel more confident. This can´t be over so easily, so painlessly, as far as I know none of the problems have been fixed, none of the excessive debt amongst citizens, corporations and government has been reduced, theres has not been any reindustrialization, there is no new internet boom around the corner, massive government spending and forced investment in eco shit can´t fix these problems.

http://money.cnn.com/2009/05/26/mark...ion=2009052617

No, it's not over. It's just beginning. What's over is the post-war era of idiotic prosperity.

[Joe_J.]

May 28, 2009
By Douglas McIntosh

http://www.stevequayle.com/News.aler...mud.flats.html

One of the nice things about being a pessimist, a certified, card carrying Doomer is times like this don't make you break down. Being a Doomer, for as long as I have been a doomer, with a doomer pedigree, papers, documents and certificates to prove it, makes one relatively immune to the wave of chaos, anarchy and lunacy sweeping the planet. As the bard said "there is a tide that lifts." I say we missed that tide. We are now flopping around in the mud flats like fish who didn't quite catch the tide. The tide flows; the tide ebbs and then it comes in again. In our case it comes back in like a Tsunami.

I have been commissioned to write an overview of the current global situation. No problem. We are road kill. A brief yet pithy description of the current global situation.

That which is, is failing. That which is to come, has not arrived. We are twirling in the wind like one of those twirly things on a stick I used to get at the carnival when I was a kid. Blow on it and it will circle, round and round and round. Stop blowing and it will just sit there. Our economic policy, such as it is, is merely the Federal Reserve or whoever blowing on the stock market twirly thing to make it spin. When the Plunge Protection Team stops blowing, or dumping money into the system, the system stops. When you are watching shillovision about the economy, or the stock market or whatever, just think about blowing on one of those twirly things. As long as you blow, it moves. When you don't, it stops. The stimulus program is merely blowing on the twirly thing. Of course, given the vast resources of hot air in that Sodom on the Potomac called Washington D. C., endless breath is available. Unfortunately, endless money is not. Even Obama is now admitting that borrowing 46 cents out of every dollar you spend is not a good idea. I am not impressed.

Having written about the kinds of things that are now daily happenings for over 10 years, please excuse me if I am not in hysterics, or freaking out, or overly upset. There are worse things than death. There is a life without honor, or truth, or justice. There is a life without freedom, or hope or spiritual values. There is the death of the Spirit and the death of the human body. The choice for us is not death. The choice is what dies: our bodies or our spirit. Robert Heinlein said "you can kill a free man, but you cannot enslave him." The choice for us in the days ahead is not whether we die, but how we die and what we die for. After all, in the kind of social collapse we are undergoing, it is delusional to think death can be avoided. I neither seek death, nor do I avoid it. It will come for me in its own time. I will tell you quite honestly I have become more spiritual these last few months. Some of that is probably the drowning rat looking for any piece of floating debris from the shipwreck he can find; some of it is probably age. Turning 55 teaches you wisdom whether you like it or not, if only because you try not to make the same mistakes three or four times. At any rate, there is a spiritual dimension to all this chaos going on today and if you don't see that you will be handicapped in trying to discern what is really happening.

I will say those who think things can go on like this, in the economic sphere, the military and political sphere are quite insane. Let's take economics first. What is really going on in the economic sphere is the collapse of the ability to issue debt by all types of economic entities. Whether it is state, city or county government, corporations, non profits, individuals or whoever the capacity to borrow money has ceased. Even after the greatest economic rape and pillage in history, the multi trillion bailout, stimulus blob, there is still no liquidity in the system. And the reason for that is simple, even now risk has not been probably priced into the equation. The reason for that is even more simple: there is no faith in the system and no trust in the system. And the reason for that is even more simple: there has been no accountability for the open criminal activity involved in the economic travails. The reason for the collapse is corruption and criminal fraud. Nothing more and nothing less. And until that fraud and corruption is cut out of the economic system, just like the Aztecs used to rip the still beating heart out of their victims, there will be, nor can there ever be, an economic "recovery."

Of course, under the current NWO regime there will be no accountability. That vile beast the Federal Reserve is even refusing to admit where the multi trillion bailout money went. The current economic system will not be reformed. It will not be saved. It will not be fixed. It will collapse-it will be allowed to collapse by the New World Order- and then it will be replaced. The collapse is ongoing, about to get worse as planned and then in a crescendo of chaos will be replaced just as the NWO has long planned, plotted and now executed. The NWO is scum, but I will give them their technical due.

As to what the immediate economic future holds, I will close with this. You ain't seen nothing yet. And the reason you ain't seen nothing yet is because it is not July 1st yet. At many state, city and county entities the fiscal year begins July 1, 2009. It is usually a two year cycle. The cycle for fiscal year 2010, 7-1-2009 to 7-1-2010 and 2011, 7-1-2010 to 7-1-2011. A long listing of the woes of state, city and county finances would be endless really. The essays involved in listing them would be legion. Suffice it to say, the fiscal collapse has not really started. Oh the shadow of it, the first faint glimmer of the red dawn of economic doom is visible, but the scorching, 150 F sun hasn't risen to scald the economy like a pot of milk. No, that is still to come. It comes quickly, as in about 30 days or so.

What is going to happen in July of 2009 is relatively simple. The states, cities and counties of the United States are going to go broke. Not all of them of course, but many of them, maybe even most of them. Certainly enough to trigger a Tsunami of economic chaos unseen in modern history. The Great Depression is nothing. As the social order financed by debt, funded by local spending implodes, we will see levels of social anarchy which usually follow the ends of wars or the collapse of great civilizations. And that is only if we are dealing with economic issues. There are other military issues on the plate that dwarf even economic collapse.

Just as the local collapse gathers steam, we will deal with a federal collapse, followed by open dictatorship. As the local governmental entities drown, they will reach out to the federal government, that debt soaked lush, to save them. We can be sure Obama the First will try. And then on October 1st 2009, the Federal government will crash and burn like the Hindenburg did in 1937. In the Hindenburg's case it was hydrogen; in ours it will be debt. Obama has/will borrow nearly 2 TRILLION in fiscal year 2009. And he will need to borrow another 2 TRILLION and then another and another. And it ain't gonna happen. No way and no how.

The times are certainly interesting. They will get even more interesting in July. And then by October 1st they will get beyond interesting, as in terrifying. Assuming North Korea doesn't nuke us.

We shall see....

[Joe_J.]

As though the state’s fiscal condition weren’t dire enough, Controller John Chiang sent a letter on May 29 to the governor and legislative leaders saying that on July 31 the state will be $1 billion short of meeting its payment obligations to schools, local governments and vendors.

“Based on the May Revision revenue and expenditure estimates provided to us late last week by the Department of Finance and taking into account the actual cash receipts and expenditures my office tracks, it is clear the health of the State’s treasury has significantly deteriorated since the adoption of the (budget), a mere three months ago,” Chiang wrote.

And, Chiang says, the situation only gets worse. In April 2010, the state will be $22 billion short of cash to meet its payments.

“That is more than four times the $5.1 billion cash deficit we faced this past spring,” the letter says.

Lawmakers and the governor need to act well before the end of July, Chiang points out.

The controller is preparing to sell Revenue Anticipation Warrants to cover some of the cash flow problem but “without credible budget and cash flow solutions in place, the rating agencies and potential investors who will be evaluating the credit risk of these securities will be highly skeptical about investing in California.”

Failure to act “can compromise the success of this sale or further increase what is expected to be the largest financing costs in the State’s history.”

In short, Chiang says “the state will not be able to borrow its way out of this crisis.”
Chiang “strongly” urges lawmakers and the governor act by June 15.

“Inaction would create an even greater fiscal hardship for Californians, especially those businesses that provide goods to the State and those vulnerable individuals who depend on public health and social services.”

A chart accompanying the letter lays out the situation.

http://californiascapitol.com/blog/?p=385

People are saying that California is going to go broke in June (fiscal year ends then) and that the US will follow around October. Be ready guys. Beans, butter and bullets. Stay out of the cities.

[Joe_J.]

Found at another forum:

JUst as A warning, chase bank (took over wamu) chase has been manipulating account balances in wa today. my account balance, mother along with my son and some of his buddies. THey have been changing balances showing more than actuall balances. I posted a thread about stimulus checks today because of this. What has been happening At least to the kids, the think they got some extra money and have been spending it.
The bank makes a correction and hits them with a ton of over drafts.
THey just wiped my sons account out. (He has a 8mo. child) After he saw the extra money they went to wlly world for cloths ect. same to one of his buddies. I'm at the moment thinking that wamu dept is gonna hit soon. Taking no prisoners. The teller at the bank,whom my son knew in school told him they"re doing it to everybody! Maybe a glitch, maybe not!! maybe all that wmu debt has come home to roost.

[Joe_J.]

http://news.xinhuanet.com/english/20...t_11461910.htm


BEIJING, May 31 (Xinhua) -- On the first day of U.S. treasury secretary Timothy Geithner's visit to China, the Beijing-based Global Times published a survey of 23 famous Chinese economists on Sunday, saying that the majority of them deemed the vast holding of U.S. bonds "risky."

Among the 23 experts polled, 17 said they believed that U.S. equities pose great risks to China's economy.

Geithner will begin his first visit to Beijing as US treasury secretary in an attempt to assure the U.S.' biggest creditor that its large holding of purchased US bonds is safe.

The visit also highlights Geithner's comments made earlier this year alleging that China has manipulated its currency.

Li Wei, an expert with the Institute of Ministry of Commerce, and Tian Yun, a scholar at the China Macro Economics Institute, expressed concerns over the risks, saying that the United States may export its deepening crisis to China "by printing U.S. dollar notes uncontrollably."

But five other experts, including Yi Xianrong, a researcher at the financial research center of the Chinese Academy of Social Sciences (CASS), and Mei Jun, deputy director of the Finance and Securities Institute at Renmin University of China, said they don't believe U.S. equities pose "great risks" to the country's economy.

They said compared with other investment, the investment in U.S. notes are less risky as the U.S. is still the engine of the world economy.

Hu Zhihao, a scholar of the Finance Institute of CASS, said the way China holds U.S. equities poses the risk as almost all the foreign reserves are in the hands of the government, which cannot be sustained and will have to change gradually.

Knowing the potential risks, 15 of the interviewed economists said they were against the idea to quickly offload China's possession of U.S. debt as a means to strengthen the country's financial stability and decrease Beijing's vulnerability to the already ailing world economy.

Song Fengming, director of the Department of Finance in the School of Economics and Management at Tsinghua University, said China has no better option but to buy U.S. Treasury bonds, while other options, such as the Japanese Yen and British pound, are volatile and soft.

Other experts held China should offload the U.S. debt.

Zhou Shijian, senior research fellow of the Center for U.S.-China Relations at Tsinghua University, said the vast holding of U.S. equities can be very dangerous as the Americans are not going "to reduce the speed of printing dollars."

On finding a way out, most experts said China ought to expand its investment on tangible and strategic materials such as grain, energy and mineral resources, and intangible assets such as equities and bonds.

They also believed that Chinese enterprises should conduct overseas mergers and acquisitions, while increasing exports of high technology.

Li Defeng, a professor of the School of Finance at the Central University of Finance and Economics, said China should reform its existing economic growth pattern and rely on expanding domestic demand.

He Weiwen, a director of the American Economic Association of China, said China's neighboring countries, especially in East Asia, can serve as its new investment destination.

[Joe_J.]

China's president Wen Jiabao admits he's "definitely worried" that the banana republic known as the United States will default on its debt. And it probably will--although not in the way Wen fears.
The U.S. will likely default by triggering hyper-inflation, obliterating the value of the $1 trillion that the U.S. owes China. This tactic will also obliterate U.S. citizens who have been dumb enough to save money, of course, but better that (from the government's perspective) than drowning voters in mountains of debt.

http://www.businessinsider.com/henry...on-debt-2009-3

[Joe_J.]

"China’s Concern

Seventeen of 23 Chinese economists polled in connection with Geithner’s visit said holdings of Treasuries are a “great risk” for the nation’s economy, according to a Chinese state media report yesterday. Still, the majority argued against quickly cutting them, the Beijing-based Global Times reported.

Geithner, 47, needs to show how the U.S. can prevent the value of China’s investment from being eroded by a weaker dollar or by the inflation that might be stoked by the stimulus money being pumped into the U.S. economy, according to Yu.

“It will be helpful if Geithner can show us some arithmetic,” he said.

Geithner told reporters on the way to Beijing that he’ll continue U.S. efforts to seek a larger Chinese role in organizations like the International Monetary Fund."



http://www.bloomberg.com/apps/news?pid=2....

[Hugo Böse]

http://www.ft.com/cms/s/0/52c9f2a8-4...44feabdc0.html

Investors sceptical on stock market rebound

The majority of the world’s leading investors do not believe the recent strong performance of stocks and other risky assets is sustainable, according to a report released on Monday.

The FTSE All World equities index has surged more than 60 per cent since hitting a low for the year in March.

But Barclays Capital has revealed that just 17.5 per cent of the 605 investors interviewed for its quarterly FX investor sentiment survey – including central banks, asset managers, hedge funds and international corporate customers – think risky assets have further to rise.

This is one aspect of a generally gloomy outlook for the global economy, which undermines optimism that “green shoots” of recovery are starting to emerge.

Just 4.5 per cent of respondents believe the trajectory of the global economy over the next year will be “V-shaped” – indicating weakness followed by a sharp recovery.

The majority, 69 per cent, believe the path of the global economy will be either “U-shaped” or “W-shaped”, meaning that growth will remain weak for some time before a gradual recovery begins, or that a recovery will prove temporary and renewed weakness will set in.

David Woo, head of global FX strategy at BarCap, said the results showed that most investors did not expect to see the sustainable rise in consumption, particularly in the US, that was necessary to deliver prolonged economic growth.

Six out of every 10 respondents believed that the recent rise in equities is a “bear market rally”, indicating that global investors still have a large share of their funds parked on the sidelines in cash.

The survey revealed that 91 per cent of investors were running positions that were “light” or “average” in terms of their risk limit or capacity. This leaves just 9 per cent whose positions are “large” or “at limit”.

“This is consistent with a widely shared view that many investors have missed the rally,” said Mr Woo.

“It is conceivable that some of these investors may be pressured to jump on the bandwagon if equities extend their gains.”

Investors are most optimistic on Asia’s prospects, with 57.5 per cent believing emerging market currencies in the region will outperform those in Latin America and eastern Europe in the next three months.

“There is a very strong consensus that Asia will be the beneficiary of the ‘China effect’,” said Mr Woo.

“There is strong faith that China’s massive stimulus programme will boost the economy and the region

[Joe_J.]

Tuesday, June 2, 2009, 12:21pm HAST
California will run out of cash in 14 days

Pacific Business News (Honolulu)

The state wallet is empty. The bank closed. Credit has dried up, Gov. Arnold Schwarzenegger told lawmakers in a special Tuesday morning address at the Capitol.
“California’s day of reckoning is here,” he said. With no action, the state will run out of cash in 14 days. Three months after the state budget was approved, California faces a $24 billion deficit.
Schwarzenegger has already proposed massive cuts to education, health care and prisons. Now he’s looking for structural reform to make government more efficient and stretch taxpayer dollars.
He’s asked the State Board of Education, for example, to make textbooks available in digital formats — a move that could save millions.
In 2004, the governor talked about blowing up boxes and consolidating agencies, but the initiatives never gained traction.
They’re back.
Schwarzenegger is proposing once again to eliminate and consolidate more than a dozen state departments, boards and commissions. This includes the Waste Management Board, the Court Reporters Board, the Department of Boating and Waterways and the Inspection and Maintenance Review Committee.
Earlier this year, the state began consolidating information technology departments.
Now Schwarzenegger wants to consolidate departments that oversee financial institutions and merge tax collection operations. In July, state leaders will receive recommendations on how to modernize the tax code.
“This will be a tremendous opportunity to make our revenues more reliable and less volatile and help the state avoid the boom and bust budgets that have brought us here today,” Schwarzenegger told lawmakers.
It’s not going to happen in 14 days, he said. But it could happen before the Legislature adjourns for summer recess on July 17.

http://www.bizjournals.com/pacific/s...1/daily23.html

[brutus]

Fuck the economy! Hahahahahaha!

[Joe_J.]

brutus, they have talked about cutting everything but aid to illegals or any of the social welfare programs (which may be because of Fed involvement). Cutting the mestizos out of the loop would probably save enough to make the state solvent but they won't touch that with a ten foot pinata stick.

[brutus]

RE: deathtozog

brutus, they have talked about cutting everything but aid to illegals or any of the social welfare programs (which may be because of Fed involvement). Cutting the mestizos out of the loop would probably save enough to make the state solvent but they won't touch that with a ten foot pinata stick.

That's right! He dare not hurt his little beaner friends.

I think we can expect another federal government bailout in 14 days.

BTW: I hope you don't mind the comic relief of the Arnold picture on this otherwise serious thread.

[Joe_J.]

Originally Posted by brutus

RE: deathtozog


That's right! He dare not hurt his little beaner friends.

I think we can expect another federal government bailout in 14 days.

BTW: I hope you don't mind the comic relief of the Arnold picture on this otherwise serious thread.

Shoot, no, I don't mind. Economics, to me, can be an interesting subject. It can also be very dry. We need some humor kicking around in here!

BTW, some experts that are not followers of the magic nigger believe that Obama will bail out California and that it will cause the whole Kwa economy to fall by October. We shall see.