Rhino: The last shoe

Well, for some reason, Arkansas is BOOMING. I still have two houses for sale that need work, one for $38 and one fir $48 thousand in a gorgeous city of 6500 people, 65 miles from Little Rock. So every state is not seeing this...

coming through in the next two years.

1. Two more waves of mortgage resets - Alt-As and option ARMs.
2. State and Municipal defaults.
3. Deflationary cycles just now getting underway in the BRIC countries - Brazil, Russia, India and China.

Countering these downward forces are the massive amounts of money being printed and the inflation that will follow.

THANKS FOR BEING A MEMBER OF DP AND I TOO HOPE YOU ARE WRONG AND/OR THE STATES BEGIN TO WAKE UP AND SOMEHOW RESOLVE THEIR MONEY PROBLEMS BUT I SUSPECT THEY ARE S.O.S (STUCK ON STUPID)

when I talk with a gov't employee or retiree about preparing for "hard times" ahead (I don't say depression....don't want to panic the sheeple).

They always start right back at me about how they're not worried because they have a gov't pay- or retirement check......Then I ask them if they've heard about the varous municipalities & states going broke and likely not being able to pay all of their obligations......

You should just SEE the looks on their faces......Like they just discovered that there really is no santa. Then you can see that they "get it"....that lifetime check might not actually keep showing up for an entire lifetime.

I've had quite a few interesting conversations along those lines lately....It usually opens the door for more RP/C4L type topics that I'm only too happy to discuss.

Try it for fun some time!

By the end of the first quarter 2009 ...

There will be no less than 4 states that either default on their debt or get bailed out.

It will take a few years but the Federal government will negotiate new terms on their debt and the lenders will comply.

Federal codes will force the use of NG vehicles ...

And then after a decade or two, we will completely default on our debt....

In the interim ...

A new, free market currency will have been established ...

A peaceful revolution will have begun...

"It's a free market people, if you can keep it."

WAHOR!!
http://www.dailypaul.com/...

And you run and you run to catch up with the sun, but its sinking
And racing around to come up behind you again
The sun is the same in the relative way,
but youre older
Shorter of breath and one day closer to death.

Pink Floyd

Are you talking about the stock market hitting bottom? If so, who cares? If the government stays on its current course, which I expect, the dollar - and all investments denominated in dollars including equities - will be worthless before the end of the first four years of Obama. So what the stock market does between now and then doesn't matter. Maybe it goes up, maybe it goes down. But its inescapable destiny is zero.

If you are talking about the economy as a whole nearing the bottom, I don't think you are even close. When MANY people are hungry, the grocery stores have half-empty shelves, rationing is implemented, and government job programs become the only source of new jobs, then we will be close to the bottm. And we will stay there for years.

Lets see how Arnie does this in one take.

I may not know the truth, but I know when I'm being lied to...

http://www.bloomberg.com/...

Not too far from Vallejo.

The lower the market goes, or the worse the economy gets, the closer to the bottom we are. It's an indisputable statement that we're nearing the bottom. It's the safest statement an analyst can make.

MANY more shoes to drop

http://www.breitbart.com/...

WAHOR!!
http://www.dailypaul.com/...

It's also important to understand that if our government used the same methods it used during the Great Depression to measure actual unemployment then we would be looking at current rates around 15 to 16%. Likewise, all the other methods of calculations the government uses, for public consumption, are equally as biased toward a more favorable outlook.

http://www.1776solution.b...

I would remind you that extremism in the defense of liberty is no vice! And let me remind you also that moderation in the pursuit of justice is no virtue. Barry Goldwater

Here comes the municipalities ....

The states will be next ...

http://www.breitbart.com/...

WAHOR!!
http://www.dailypaul.com/...

I know PA. is watching the budget, very close to the edge...Lost rev. from driving cars less hurt PENDOT big time....POLICE are making it up on tickets...BIG push right now...
weee

I think you are correct but there is still one giant shoe to drop.. that is otc derivatives! just wait till tomorrow when we find out who is going to fit the bill for lehman brothers bankruptsy on the insurance claim of about 365 billion in swaps! what ins. co. gets tagged, how many get tagged and for how much! any going to go bankrupt themselves, and what systemic problem does that cause.. tomorrow will be interesting!

"When governments fear the people there is liberty. When the people fear the government there is tyranny."
-Thomas Jefferson

I am more concerned about the return of my money than the return on my money. --Mark Twain

updated 6:51 p.m. EDT, Wed October 8, 2008
(CNN) -- The demand for unemployment benefits across the country has put a strain on state unemployment funds, with such funds in at least 10 states facing insolvency in 2009, according to a policy group.

Lines form at a job fair in Fort Lauderdale, Florida, in August.

Nationwide, unemployment reached 6.1 percent, or roughly 9.1 million people, in August, up from 4.7 percent in 2007, and is expected to continue rising. The U.S. Department of Labor said that in August, claims for unemployment benefits reached their highest levels since 2001, in large part because of hurricane activity on the Gulf Coast.

With a weekly average of 474,000 new applicants in August, in a system already looking after about 3.5 million people each week, the growing rate of recipients has nearly depleted unemployment funds in several states.

"There are some real serious problems with unemployment funding that need to be addressed," said Andrew Stettner, deputy director of the National Employment Law Project, a policy group that advocates on behalf of unemployed and low-wage workers.

The group, which tracks legislation and activity related to state and federal unemployment benefits, says that California, Michigan, Missouri, New York, Ohio, South Carolina, Wisconsin, Indiana, Kentucky and Arkansas have less than six months' worth of unemployment trust fund reserves, putting the funds at high risk of insolvency.

On Tuesday, California state officials told lawmakers in a hearing that their unemployment reserve fund was on track to run dry by March based on the state's forecast unemployment rate, which hit 7.7 percent in August.

Last month, South Carolina Employment Security Commission chief Ted Halley said his state's fund was also projected to run out by January. As of August, the state's unemployment rate was 7.6 percent.

Eight more are on the cusp, based on a formula that projects the amount of money the state would need in a recession.

"These states are not ready for a recession, and they're going to see a big hit if we have a protracted job slump," Stettner said. "We're going to see them seriously in the red, but they can take some action and not be swimming in red ink."

Trust fund revenue comes from payroll taxes on employers, based on a tax system set at the state level. But, as the amount paid out in unemployment claims has risen, the terms set to generate revenue largely have remained static, combining with the current economic downturn to create a climate that economists say many states are ill-equipped to bear.

Economists blame the situation on the failure of states to beef up their reserves when the economy was in better shape.

"When times were good, instead of putting money into a trust fund, lawmakers gave in to anti-tax fervor and refused to raise taxes to build up a healthy trust fund," said Ross Eisenbrey, vice president of the Economic Policy Institute. "Now, as payrolls decline and tax revenue declines, there is less money going into funds that were already running low."

Eisenbrey said he expects the health of state trust funds to worsen before it improves.

"The economy has been hit hard the past year. Housing deflation, oil price shocks and flat wages have been reducing consumer demand, and now the credit crisis is causing businesses to lay off more workers, so it's kind of a negative loop that feeds back into the economy," said Eisenbrey, pointing out that median household income has declined since 2000, a first since the World War II era.

When reserves run dry, states can borrow from the federal government's unemployment trust fund. Typically, states have a year to repay the loan without accruing interest.

Michigan, which has the country's highest unemployment rate, at 8.1 percent, is already borrowing from the federal government, even though it is not in the red just yet, according to a spokesman.

"We've been attempting to borrow money and pay it back as soon as we can," said Norm Isotalo, a spokesman for the Michigan Department of Labor and Economic Growth. He attributed rising unemployment claims to the embattled automotive industry and its ripple effect across the state.

"We want to be able to have enough money to cover our forecasts," said Isotalo, adding that the state borrowed from the federal government in the mid-1990s for similar reasons.

But the forecast is not all doom and gloom, provided the states shore up their reserves, with the help of the federal government and through initiatives of their own, Stettner said.

Historically, first and fourth quarters are low periods for generating revenue that state trust funds so desperately need. But Stettner's group advocates an increase in the tax base that contributes to state trust funds, a move that could be a hard sell considering the timing.

The group has also pushed for legislation that would allow the federal government to transfer funds from its reserve to the states, provided they put programs into place that would loosen the requirements for unemployment benefits eligibility among low-wage workers and part-time workers.

"Many of the states facing solvency challenges could be going into red as early as 2009, but it's still early enough for them to get out of it," he said. "The trick is to make a system that's self-financing."
~~~~~~~~~~~~~~~~~~~~~
"It is your duty as loyal Americans to Shut up."– Bill O'Reily

Thanks for posting this.

WAHOR!!
http://www.dailypaul.com/...

Pension Time Bomb

By George Will
VALLEJO, Calif. -- Mayor Osby Davis, who has lived in this waterfront city across San Pablo Bay from San Francisco for 60 of his 62 years, says: "If you have a can that's leaking two ounces a minute and you put an ounce a minute in it, it's going to get empty." He is describing his city's coffers.

Joseph Tanner, who became city manager after this municipality of 120,000 souls was mismanaged to the brink of bankruptcy, stands at a whiteboard to explain the simple arithmetic that has pushed Vallejo over the brink. Its crisis -- a cash flow insufficient to cover contractual obligations -- came about because (to use fiscal 2007 figures) each of the 100 firefighters paid $230 a month in union dues and each of the 140 police officers paid $254 a month, giving their unions enormous sums to purchase a compliant city council.

So a police captain receives $306,000 a year in pay and benefits, a lieutenant receives $247,644, and the average for firefighters -- 21 of them earn more than $200,000, including overtime -- is $171,000. Police and firefighters can store up unused vacation and leave time over their careers and walk away, as one of the more than 20 who recently retired did, with a $370,000 check. Last year, 292 city employees made more than $100,000. And after just five years, all police and firefighters are guaranteed lifetime health benefits.
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Even the City Council has at last faced facts and voted 7 to 0 for bankruptcy. "The day after they voted," Davis says, "I didn't go out of the house -- I was that embarrassed."

Continue reading here:
http://www.washingtonpost...

"California may not need emergency federal funds after all, Gov. Schwarzenegger said in a letter to Paulson, less than a week after he first wrote to the U.S. Treasury inquiring about $7 billion in short-term financing." WSJ
.
Guess they said NO.
.
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At first splash of Eden we race down to the sea,
standing there on Freedom's Shore....

They are heavily invested in the markets are are losing money. They have consolidated into just a few media corps.

They are now "too big to fail". So we'll get to bail them out too. Of course there will be public outcry, and they will put in "protections".

Since the government will have an ownership interest they will approve content. No one wants taxpayer money going to promote anti-government sentiments.

The snowball keeps growing.

these are IMF styled techniques being used...now in this country.

the weak banks are nationalized...so they play ball like the majors want them to play.

next is the states...is there a coincidence that the 1st out the blocks are the 2 most populous states in the union???

as long as they can hold the 'system' together, this whole situation plays to their advantage here.

the fly in the ointment is that the public is on to their tricks before it happens...AND DOES SOMETHING ABOUT IT.

what that is is up to fate...and us.

listen to the end of Dr. Paul's speech at the JBS -- he alludes to this situation.