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32 States Now Officially Bankrupt: $37.8 Billion Borrowed From Treasury To Fund Unemployment; CA, MI, NY Worst

Tyler Durden's picture




 

Courtesy of Economic Policy Journal we now know that the majority of American states are currently insolvent, and that the US Treasury has been conducting a shadow bailout of at least 32 US states. Over 60% of Americans receiving state unemployment benefits are getting these directly from the US government, as 32 states have now borrowed $37.8 billion from Uncle Sam to fund unemployment insurance. The states in most dire condition, are, not unexpectedly, the unholy trifecta of California ($6.9 billion borrowed), Michigan ($3.9 billion), and New York ($3.2 billion). With this form of shadow bailout occurring, one can only wonder how many other shadow programs are currently in operation to fund states under the table with federal money.The full list of America's 32 insolvent states is below, sorted in order of bankruptedness.


California $6,900
Michigan 3,900
New York      3,200
Penn. 3,000
Ohio 2,300
Illinois 2,200
N.C. 2,100
Indiana 1,700
New Jersey    1,700
Florida 1,600
Wisconsin 1,400
Texas 1,000
S.C. 886
Kentucky      795
Missouri 722
Connecticut 498
Minnesota     477
Georgia 416
Nevada 397
Mass. 387
Virginia 346
Arkansas 330
Alabama       283
Colorado 253
R.I. 225
Idaho 202
Maryland      133
Kansas 88
Vermont 33
S.D. 24
Tennessee 21
Virgin Islands 13
Delaware 12

 


h/t Jing

 

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Fri, 05/21/2010 - 19:49 | 366925 faustian bargain
faustian bargain's picture

Zombies

Fri, 05/21/2010 - 20:38 | 367015 Moneygrove
Moneygrove's picture

And when will the ceo`s bring back the jobs from china ??????????? p.s. I want a ceo tax now !!!!!!!!!!!!!!! 

Sat, 05/22/2010 - 05:11 | 367397 Keyser Soze
Keyser Soze's picture

Pah. Billions? The word 'billion' has no fear anymore. After TARP et al, I fear only trillions. And when you owe trillions, you are Zimbabwe and move to someone else's currency.

Sun, 05/23/2010 - 12:38 | 368706 Problem Is
Problem Is's picture

"Zombies"

Zombie States:  Cali  =  Citi  =  TBTF
That is my theory anyway. Having been born in Cali and lived here most of my life, Cali needs the TBTF breakup.

The politicians are douche bags of Congressional proportions. These jackass legislators even pay themselves like douche Congress...

The economy is big enough that the fraud, bribery and systemic corruption are of national levels. Economies of scale have clearly failed in this state.

$20 Billion Budget Deficit
Every year the douche baggery that is the legislature plays the same game with Governor Broke Ass Arnold. They lie their asses off about revenue projects and declare a budget deal which has to be balanced.

They then wait until after Xmas... would not want to scare the sheeple and keep them away from the malls... sales tax revenue you know... and then admit a multi billion dollar deficit... last 3 years running...

Steroid Arnie
What is Broke Ass Arnold's solution to the current $20 billion budget deficit?

We need to build a $12 billion CEMENT ditch between the north and LA.... Yeah sell those bonds Arnie...

'Roid Boy, make like a Palin tree and leave early...

Fri, 05/21/2010 - 19:51 | 366929 mrhonkytonk1948
mrhonkytonk1948's picture

I suspect this will be papered over - if at all possible - at least until after the mid-terms.   The public employees unions are not to be trifled with.

Fri, 05/21/2010 - 19:54 | 366936 silvertrain
silvertrain's picture

 Thats one of the 1000000+ reasons they will fight against an audit....

 The commercial shorts on gold were still at a mind blowing 480k..Unreal..People that hide stuff have stuff to hid..It must be very important to them..That makes me want it even more so..

Sat, 05/22/2010 - 14:04 | 367750 DosZap
DosZap's picture

ST,

Here's one DUMMY.....LOL

Think he reads the HEDGE?

http://online.wsj.com/article/SB10001424052748704167704575258783702875778.html

Fri, 05/21/2010 - 19:56 | 366940 thesapein
thesapein's picture

You tricked me.

"officially..."

I agree they should be declared bankrupt, but thinking so does not make it official.

 

 

Fri, 05/21/2010 - 23:31 | 367214 John Self
John Self's picture

States aren't eligible to be debtors under the Bankruptcy Code, so it's impossible for this to be official.

Sat, 05/22/2010 - 08:31 | 367465 lawton
lawton's picture

Arkansas didnt see it that way during the depression.

Sat, 05/22/2010 - 11:18 | 367592 thesapein
thesapein's picture

So Tyler is speaking in nonsensical riddles?

Sat, 05/22/2010 - 17:27 | 367978 faustian bargain
faustian bargain's picture

maybe 'bankrupt' is metaphorical...for bankrupt.

Fri, 05/21/2010 - 20:03 | 366956 digalert
digalert's picture

California, land of fruits and nuts is tops...whoohoo

Sat, 05/22/2010 - 00:33 | 367250 snowball777
snowball777's picture

Land of $1.2T SDP, 36M people, gerrymandering that make our districts do yoga, and fucking Prop 13.

We need more fiscal restraint (public sector unions bedamned), but our real issue is that we've handicapped our ability to pass taxes to offset our laws so everything is a ballot initiative that is funded by bonds...good for the jerkoffs at the country club (yeah you Meg...you mormon GS / Mammon whore), bad for CA.

$6.9B / 3.6M (at 10% unemployment...although my county is less and has only 4% mort default rate) == $1919.67...or about 2 weeks worth of our max unemployment payout before taxes per capita.

 

Sun, 05/23/2010 - 01:06 | 368299 G-R-U-N-T
G-R-U-N-T's picture

Snowball,

"but our real issue is that we've handicapped our ability to pass taxes to offset our laws."

YOU CAN'T HAVE ANY MORE OF OUR MONEY!!!!!!!!!!!!!!!!!!!!

In California an Austrian actor tried to subjugate the Unions, I mean the Assembly, and wound up as a eunuch, and eunuch's end up becoming beholden to their masters.

The last looting extravaganza attempt initiative was prop 1A, and Californian's said no f*&%$#g way. It went down in flames, even though most republican's in the Assembly endorsed the bill while signing pledges of no new taxes months before. Radical left ideology, and the hypocrisy of the right will always end up with their own annihilation. Sometimes it comes at a snails pace, and when Californian's are in enough pain things will change. Another attempt by radical Government parasites to loot the Californian citizenry, that would dwarf all other previous tax increases is AB32 (California Global Warming Solution Act). Thank God we got enough signatures to at least put the "California Job Initiative" on the ballot for November. Californian's I hope, will be smart enough stop the the AB32 Fraud by voting for this initiative.

 

 

 

 

 

Sat, 05/22/2010 - 01:13 | 367278 Dburn
Dburn's picture

Lets hear it for Indiana at 1.7 Billion who recently financed a 1 Billion (766 million before interest) stadium for the Indianapolis Colts while state has been in the top 5 or 10 in bankruptcies and foreclosures for going on three years now. They just couldn't bear to part with the Colts for those 8 week-ends (a few more if Manning didn't Choke) a year that many downtown businesses, owned by out-of-state chains get more business while the downtown businesses around the state get less.

The hurrying "Hoosiers" led by one time Bush Budget Director Mitch "My Man" Daniels who most famously said as Budget Director "The country is awash in cash" when asked about one tax cut after another just as the trajectory had changed slightly towards possible solvency or at least a negotiated haircut.

He then went on to ride the wave of Bush popularity into the Governor's house and stayed in there thanks to the populace who couldn't get enough them thar' Colts, where in a brilliant stroke of , marketing genius, the stadium was named Lucas Oil Stadium as Gas climbed to $4.00 a Gallon. So most of the Hoosiers stayed at home because with gas prices and no jobs, how could they pay $50 for a back bench seat in the new stadium (plus $10 for parking) ?

Boooyahh to being in the top ten again.

Sat, 05/22/2010 - 06:52 | 367420 cossack55
cossack55's picture

Let's not forget the Pacers holding up the city for 15 mil a year to operate their monument to stupidity, Conseco Field House (remember Conseco, they just recently changed their name to some other crap).  They are just to broke to pay for the operation even though they derive all income from annual events.  Not to mention I just saw on the front page of the Indy Star where your man Mitch is accellerating buiding of I-69 so people can get to Evensville, In 20 minutes faster, though I have no clue why one would want to get to Evansville for any reason.  Must be that free goobermint money.  Say, isn't that part of Illuminati Rick Perry's Trans-Texas corridor?  Huh, good thing I'm not a cynic.  And not to mention the water company soon to go private. A $100 mil company with  $5 bil unfunded repair bill.  What a deal.  Mitch for Prez in 2012.  Oops, I forgot. No US in 2012.

Sun, 05/23/2010 - 01:42 | 368323 Dirt Rat
Dirt Rat's picture

Whoa, other Hoosiers on this tin foil hat board. Vincennes reporting in here. We have good farmland down here and tight knit communities with a huge streak of xenophobia. Plus, we're remote and kind of difficult to get to. I think we'll weather the approaching storm quite well down here.

Sun, 05/23/2010 - 10:49 | 368568 cossack55
cossack55's picture

No doubt. I've relatives in Vincennes and Knox County does produce the best tomatos and melons on the planet.  Watch out for the Meth plague though.

Fri, 05/21/2010 - 20:05 | 366960 plocequ1
plocequ1's picture

Per Alex Jones, The plan is working. NWO, Here we come. This is not good

Fri, 05/21/2010 - 21:10 | 367068 Apostate
Apostate's picture

It's so darkly amusing that Alex Jones is actually looking prescient.

It's as if the elites are using his show like a business plan.

He's been... extremely wrong on many things. 

Sat, 05/22/2010 - 03:37 | 367370 RabidLemming
RabidLemming's picture

Alex Jones may not be 100% correct 100% off the time. He is correct more than he is wrong and he has always been the loudest voice in warning people of the coming storm... like his style or not the proof is in the pudding. All that he, Celente and Chapman have warned about is slowly starting to come true. 

Beans, Bandaids, and Bullets bitches!

 

 

Sat, 05/22/2010 - 14:16 | 367760 DosZap
DosZap's picture

RL,

Don't forget Schiff..............he's been on top of this since before it started, 1998-99...........

See the votes he got in Conn?.

Sucked,like 10..........they got like an ex-dancer for the candidate.LOL

One more example of FISCAL insanity..........

Can you imagine Schiff,Both Paul's reaming ass's?.

Would have been great.

Sat, 05/22/2010 - 06:42 | 367422 cossack55
cossack55's picture

Prescient my posterior.  He just read "Atlas Shrugged".

Sat, 05/22/2010 - 20:34 | 368118 Lower Class Elite
Lower Class Elite's picture

Ayn Rand: Zarathustra for sorority girls.

Sat, 05/22/2010 - 14:10 | 367757 DosZap
DosZap's picture

Apostate, even a blind Hog finds an acorn once in while......... Anyone with HALF a brain, knows this entire debacle is / has been orchestrated, and will continue to be. This is not a Human directed systematic destruction........ We are being set up, for the ONE to come.( and no, not the 12th Imam)......... Time is short gents, and much shorter than anyone knows.IMHO

Fri, 05/21/2010 - 20:07 | 366965 HFT1
HFT1's picture

Nice let the revolution begin, PLEASE!

Fri, 05/21/2010 - 20:17 | 366982 Nikki
Nikki's picture

Since we in Michigan are a much smaller State than Cali, it is only fair than we be graded on a curve. We insist on being number 1 in unemployment and per capita bailout. Still think driving your import car is cheaper than a Ford, GM or Chrysler ?. Have you found the Fine print in the cost yet for your imported goods (not just cars my friends) ?... You will when taxes go up.. Unless you are a bk attorney, welcome to the trickle down... An appropo euphamism if there ever was one...

Fri, 05/21/2010 - 21:05 | 367062 Nikki
Nikki's picture

Ouch. Junked by a Hyundai owner, convinced that there is free trade between the US and many of our trading partners, trade imbalances don't matter and we can be a nation of paper traders instead of manufacturers while spending for other's wars, welfare , health care and retirement on your children's credit card.

Free trade is a lie.
Our freely made personal sacred consumer choices can hurt others, be they UAW douchebags or little Chinese slave girls.
Our deficit spending is a fraud commited against future Americans.

Just post 'wrong with explanation.....' and then junk the post.

Sat, 05/22/2010 - 07:52 | 367446 fuu
fuu's picture

If they are junking you, you must be doing something right.

Sat, 05/22/2010 - 08:27 | 367464 cossack55
cossack55's picture

Sorry, Nikki.  I was reading your post at about 2:45 AM and had not imbibed enough coffee yet.  I missed your point entirely.  Will not happen again.  BTW, I drive a Ford and love it and the 260k miles it has carried my ever expanding posterior.

Fri, 05/21/2010 - 21:18 | 367081 NERVEAGENTVX
NERVEAGENTVX's picture

Don't worry the economy is recovering beautifully! Chrysler is adding a second shift at jefferson north assembley,1,100 new workers!<end sarcasm> of course not the prevailing wage jobs, the 14$ an hour  poverty line jobs.

Fri, 05/21/2010 - 21:43 | 367108 Nikki
Nikki's picture

Zall right brother, sarcasm can remain on, I like it. The deflationary wage spiral will hit more than those Scheisseler folks. When was the last time you had a raise ?... Your cost of living any cheaper ??.

Yep. Economy is getting better, if you are a banker.

Sat, 05/22/2010 - 00:40 | 367254 snowball777
snowball777's picture

My granddad worked his entire 45 year career at Ford.

What if their Toy-motor is made in TN (well, before the flood)?

How's that cadillac health plan treating you?

Checks for not working still being cashed okay?

Don't blame us for you letting dickheads like Rick Wagoner make nothing but SUVs in a gas hike okay?

Sat, 05/22/2010 - 09:47 | 367510 Nikki
Nikki's picture

In all honesty, I cannot defend the jobs bank or Dickhead Wagoner. No one can. I cannot defend the $85 hour compensation package for UAW thugs either. What I will vigoruously defend is the virtuous cycle of consumer capitalism espoused by Henry Ford. There are only about 20% of Americans with higher education (some of that is surely a joke) and the rest, whether for lack of intellect or means, are unskilled. If I am well compensated for the design of the car or tv etc.. And you are adequately compensated for building the car or tv (more skill, more pay), weboth participate in the economy as consumers.... And (shit) as taxpayers. As the sociopaths, crooked and truly worthless amongst us are absorbed into goverment jobs we can withstand the parasite for a while. Our adequate compensation allows others (Disney, restaraunt, tourism) to also participate in the virtuous cycle. When we decide or allow the parasites or several of the spokes in the wheel to break, our cycle gets fucked. In my greater point, now that we have allowed textiles, steel and manufacturing to be decimated by outsourcing, the parasites are revealed to be killing the
host. Your Alabama made Hyundai was designed in Korea and built by low wage workers. Their pinto pay check and health care plan is a weaker spoke in our cycle's wheel and their spending habits will show this.

Ahhh crap, I am rambling on my first coffee. Let me summarize and apologize. If you don't see how we need each other and have used our mutual need for mutual benefit and now that we shred each other to pieces by denying our mutual need then I cannot win you over and we are lost. If it's every man for himself then societ's collapse is inevitable.

Guns and gold bitches....

Now press junk..

Sat, 05/22/2010 - 23:12 | 368214 spekulatn
spekulatn's picture

Fuk the junk, Nikki. 

I say, well said you!

Fri, 05/21/2010 - 20:19 | 366983 RockyRacoon
RockyRacoon's picture

One little metropolis at a time, like Chinese water torture.

$3 million in debt, Central Falls, R.I. in receivership.

Declaring fiscal insolvency, city officials Wednesday persuaded a Superior Court judge to appoint a receiver to take over municipal finances, a process that could end up with new contracts imposed on the city’s unions and vendors.

Receivership is the state-law version of federal bankruptcy. The court-appointed receiver has the power to approve or reject purchases and payments and, if the court approves, change contracts with unions and vendors and hire and fire municipal employees.

City Solicitor John T. Gannon said the city is in the middle of all its municipal employee union contracts. Mayor Charles D. Moreau has been trying to negotiate concessions, he said, but without success.

Central Falls’ slogan is “A City with a Bright Future,” but the present has been pretty grim. Its high school, where 96 percent of its 800 students live in poverty, was targeted for a state-ordered reorganization because of consistently low scores and graduation rates. The entire teaching staff was threatened with dismissal until the administration and the teachers union reached an agreement last weekend.

In its petition to the court for appointment of the receiver, the city administration said it has an anticipated deficit this fiscal year of $3 million on a city budget of about $18 million and an anticipated deficit $5 million in the budget year beginning July 1. The officials said the shortfall could not be covered by austerity measures.

Beside the budget shortfall, the city’s pension fund for its police and fire retirees has $4 million, way short of its accrued liabilities of $35 million. Gannon said the city pays out $2.2 million a year in pension benefits from the fund.

In addition to unilateral cuts in pay and benefits enacted by the East Providence School Committee in January 2009, the city has also cut benefits for police officers and school custodians, laid off municipal custodians and threatened major changes in the firefighters’ contract. The Fire Department pact is in the midst of what may be a year-long arbitration.

KEY POINTS: Central Falls

Population: 18,928

Budget: $17.8 million

Municipal employees: 151 full-time positions

Employee costs: $7.6 million

Anticipated deficit 2009-10: $3 million

Anticipated deficit 2010-11: $5 million

Fri, 05/21/2010 - 22:45 | 367179 LeBalance
LeBalance's picture

“A City with a Blight Future”

Sat, 05/22/2010 - 04:46 | 367395 Herne the Hunter
Herne the Hunter's picture

for (i = 1; i++; i = 10) {
    LOL
}

Sat, 05/22/2010 - 07:17 | 367437 Stepney
Stepney's picture

With code like that we can see why the Indians are taking all the jobs.

Sat, 05/22/2010 - 20:09 | 368093 sethstorm
sethstorm's picture

The problem is that's offshore level quality, not US.  Abysmal and easily fixed by the person who got offshored.

Sun, 05/23/2010 - 05:05 | 368309 Oh regional Indian
Oh regional Indian's picture

Sorry, I had to get the tea out of my nose, laughed so hard when I read US and quality in the same line.

Yes, sarcasm aside, which Quality US products are you holding up for inspection Seth?

Ahhhh, all of dem armaments, made of mil spec parts on Military budgets. Yup, that's quality all right, with a 30 X safety factor and limitless budget, that kind of quality is easy.

Code? Mwwwwharhhh...... hmmmmmm..... ok, next....

So, any of you brilliant folk follow the CAFR story?

http://cafr1.com/

Been around a while. Seems entirly credible.

TD? I think CAFR deserves scooootiny (oops, bad Indian quality of spoolings).

Espeshully in light(and dark) of your headlining storyine here in which is A post tate!

Thank you.

A Kooallitty bitty conshus Injun (brown, not red!)

Okay.

PS: This is an edit, too heavy on the sarcasm re. American quality, have seen absolutely awesome Hobbyist/Garage tinkerer/craft etc. work, was speaking of things like GM/Ford etc. Industrial mfg., which really hardly exists there anymore anyways.

And code-wise, as a silicon valley veteran, most code jocks were Indian/Chinese, in house, local, not offshore. Most offshore is support anyways.

Why did I do this edit? Because I found the creeping trash/yahoo culture on comments creeping into my system, is all.

Fri, 05/21/2010 - 20:22 | 366988 Mr Creosote
Mr Creosote's picture

Methinks Ben and Timmy's efforts in protecting the economy shall be as effective as those of the Black Knight.

http://www.youtube.com/watch?v=zKhEw7nD9C4

Fri, 05/21/2010 - 20:25 | 366991 Cow
Cow's picture

Just because a state borrows money to pay unemployment insurance does not mean it is bankrupt.

 

Fri, 05/21/2010 - 20:35 | 367009 deadparrot
deadparrot's picture

True, if you think of it like a person taking out another credit card. You are just adding to your existing debt. However, states have much more strict budgets. They must fund education, police, fire department, etc. Considering states are facing decreasing revenues and increasing expenses, in this situation, they are effectively insolvent. 

Fri, 05/21/2010 - 23:06 | 367197 Iam_Silverman
Iam_Silverman's picture

Nice cow.  Butler cross?

From a TLH breeder.

"Just because a state borrows money to pay unemployment insurance does not mean it is bankrupt."

Good point.  If someone gets a payday loan or has a mortgage, they might not be totally insolvent either!  I see what the states are doing as a defensive move - since the unemployment terms keep being extended by the federal government, why not make them fund it?

Sat, 05/22/2010 - 15:18 | 367851 oklaboy
oklaboy's picture

It is the only "legal" way that staes with balanced budgets restrictions to add debt, off the balance sheet. They don't or have not budgeted any excess funds, because they have none. All budget gimmickery. They have to pay it back after one year, or intrest compounds. Barry will either own you in the end or just forgive the loans all together.  We are in for one helluva crash, sooner or later.   

Fri, 05/21/2010 - 20:26 | 366996 JoshRoman
JoshRoman's picture

 

So we all know that a lot of states are insolvent, but this isn't even close to proof and in no way can be construed as bankruptcy.

First off, no source is cited in the original article.  

Second, there are a number of reasons a state might borrow funds from the federal government to cover unemployment insurance shortfalls rather than dip into their general budget, in debt or not.   If you've got a rich uncle willing to give you a $100 bucks to cover some bills, why spend your own $100?

Major states will default in the next few years, certainly, but you guys sound like a couple of pimply-faced teenagers with their first Victoria's Secret catalog.  Wait for the real thing...

 

Fri, 05/21/2010 - 20:37 | 367011 hack3434
hack3434's picture

Open your own blog and write about it. 

Fri, 05/21/2010 - 20:47 | 367033 fxrxexexdxoxmx
fxrxexexdxoxmx's picture

 If you've got a rich uncle willing to give you a $100 bucks to cover some bills, why spend your own $100?

That sounds like some SEIU bullshit. The rich uncle in your example is me and my families taxes. It is stealing food from my children.

 

Fri, 05/21/2010 - 20:39 | 367017 ratava
ratava's picture

everything is a-ok, keep shorting euro

Fri, 05/21/2010 - 21:52 | 367102 Fraud-Esq
Fraud-Esq's picture

Whoa boy

easy does it! The unemployment insurance funds are deliberately not drawing on other state funds to get interest free loans from the Fedgov. The

states aren't bankrupt. (you could argue insolvent but can't just look at unemployment trust fund). 

Now, they get to trigger interest free loans. Ta-da. Without this option, the numbers

would be different (and state tax policy). But, a free loan can delay some decisions, huh. What might anger some people is they're supposed to start

paying interest around 5% next year. (while bigbanks get ZIRP). We'll see how that goes down, if it does. I'd draw max too. Only thing surprising was

NY wasn't second, Michigan third, because NY maxes their interest free drawing every year, regardless of employment, just like Golden Sacks advised.

 

Fri, 05/21/2010 - 21:40 | 367104 Crab Cake
Crab Cake's picture

Is this not "hot" monetization?  The states are spending this money?  No? 

Wow.  That's all I've got. 

Crazy Train - Ozz

http://www.youtube.com/watch?v=3MLp7YNTznE&feature=related

Righteous.

Sat, 05/22/2010 - 08:28 | 367459 Crime of the Century
Crime of the Century's picture

This is how Wenzel and Denninger get to pound the table "The FED is not printing money!!". Yeah, well, if you got nothing (unemployed workers and crashed UE fund), and then it becomes something (spendable EUC), it is "printing" debt. Debt is supposedly money, therefore, ergo, blah blah blah.

Who cares who is issuing at this point?

Fri, 05/21/2010 - 21:43 | 367109 FischerBlack
FischerBlack's picture

It takes a village...

Fri, 05/21/2010 - 21:47 | 367116 zhandax
zhandax's picture

Here summarized is the scale of the problem with taking back our country.  In a republic, the states can force the federal government to heel and take back ownership of the country at will.  How can they reasonably be expected to do that with this scale of indebtedness to the entity they should be directing?

Sat, 05/22/2010 - 13:15 | 367711 The Mighty Monarch
The Mighty Monarch's picture

Well, for one we aren't a republic anymore. We abandoned that when we allowed for direct election of senators and presidents, fixed the House at 435 members, and massacred states' rights.

We may still restore the republic, but it will take a state revolt (led by states like Montana, Arizona, and Texas who see the writing on the wall), with multiple states asserting their 10th Amendment rights and rejecting further federal instrusions.

Of course, there's absolutely no hope for states like California. The SEIU owns the state legislature, and they will see Los Angeles and Sacramento burn to the ground before they give up the six-figure salaries and retirement at age 55 with full pay and lifetime bennies. And they'll probably start the fires.

 

Fri, 05/21/2010 - 22:01 | 367137 Apostate
Apostate's picture

The first that are being hit are the public universities and bottom-feeding .

Those are politically weak, disarmed, and disliked by the well-connected classes.

The students are mostly minorities, recent immigrants, and the lower-middle class. Municipalities are able to conceal unemployment and underemployment numbers by keeping adults in extended education pursuing BAs, MAs and PhDs that will never result in jobs.

As these budgets are cut, it will be far tougher for the ratings agencies to maintain the artificially high ratings of media/political meccas like New York and California.

Eventually, they will be downgraded. All hell will break loose shortly thereafter, and the chattering classes will no longer be able to maintain the plausible deniability that the government is in control.

QE and state bailouts are a certainty at this point.

The headlines

"Obama to California: Learn to Swim"

and

"Obama to New York: Drop Dead"

Will be avoided at all costs - at least until after the midterm elections. The financial regulation bill, if passed quickly, may fuck things up severely in NYC just because so tax revenue is concentrated in the financial sector.

Sat, 05/22/2010 - 09:59 | 367524 Juan Venti
Juan Venti's picture

+1 Nice

Fri, 05/21/2010 - 22:08 | 367147 Tex Mex Hickspanic
Tex Mex Hickspanic's picture

When I complain about my ex-wife, my current wife always reminds me, "you picked her."  After consistently electing the worst possible choices for leading our country, I will say to all of us, "we picked 'em"!

Sat, 05/22/2010 - 01:26 | 367291 Moneygrove
Moneygrove's picture

wrong the court picked him !!!!!!!!!!!!!

Sat, 05/22/2010 - 08:59 | 367467 Crime of the Century
Crime of the Century's picture

Of course Gore won. That is why Gaia weeps and has projectile vomiting in Iceland and diarrhea in Louisiana...

Sat, 05/22/2010 - 15:52 | 367894 Moneygrove
Moneygrove's picture

Drill baby drill from MCcain ,palin and cheney !!!!!!!!!!! how is that working out for you gulf states ??????????? suckers !!!!!!!!!!!!!!!!

Fri, 05/21/2010 - 22:59 | 367148 metastar
metastar's picture

Lets be fair ZH. According to my calculations Wisconsin, Virginia, and Vermont are the biggest offenders ...

             Amount                                     
             Borrowed                   Amount Borrowed  GDP by State  Amount Borrowed
State        (Millions) Population      Per Capita        in Millions  As Pct of state GDP

Michigan     $3,900     9,969,727        $391.18            331,036        1.18%
Indiana      $1,700     6,423,113        $264.67            211,092        0.81%
Wisconsin    $1,400     5,654,774        $247.58            196,955        0.71%
S.C.           $886     4,561,242        $194.25            126,316        0.70%
Penn.        $3,000    12,604,767        $238.01            438,886        0.68%
N.C.         $2,100     9,380,884        $223.86            329,091        0.64%
Kentucky       $795     4,314,113        $184.28            127,031        0.63%
Ohio         $2,300    11,542,645        $199.26            388,281        0.59%
R.I.           $225     1,053,209        $213.63             38,456        0.59%
California   $6,900    36,961,664        $186.68          1,539,444        0.45%
Idaho          $202     1,545,801        $130.68             45,545        0.44%
New Jersey   $1,700     8,707,739        $195.23            387,955        0.44%
Illinois     $2,200    12,910,409        $170.41            514,848        0.43%
Arkansas       $330     2,889,450        $114.21             78,716        0.42%
Nevada         $397     2,643,085        $150.20            103,853        0.38%
Missouri       $722     5,987,580        $120.58            191,235        0.38%
New York     $3,200    19,541,453        $163.75            949,499        0.34%
Connecticut    $498     3,518,288        $141.55            178,470        0.28%
Florida      $1,600    18,537,969        $86.31             613,351        0.26%
Minnesota      $477     5,266,214        $90.58             212,790        0.22%
Alabama        $283     4,708,708        $60.10             136,144        0.21%
Vermont         $33       621,760        $53.08              21,343        0.15%
Colorado       $253     5,024,748        $50.35             197,303        0.13%
Mass.          $387     6,593,587        $58.69             306,503        0.13%
Georgia        $416     9,829,211        $42.32             331,339        0.13%
Texas        $1,000    24,782,302        $40.35             907,358        0.11%
Virginia       $346     7,882,590        $43.89             320,331        0.11%
Kansas          $88     2,818,747        $31.22              96,016        0.09%
S.D.            $24       812,383        $29.54              29,274        0.08%
Maryland       $133     5,699,478        $23.34             217,948        0.06%
Delaware        $12       885,122           $13.56           50,054        0.02%
Tennessee       $21     6,296,254        $3.34              209,144        0.01%
 

References:

Real GDP by State 2007 Millions of chained (2000) dollars

http://www.bea.gov/newsreleases/regional/gdp_state/2009/xls/gsp0609.xls

 

Estimates of the Population for the United States, Regions, States, and Puerto Rico: July 1, 2009

http://www.census.gov/popest/states/tables/NST-EST2009-01.xls

*Best data readily available to an outsider. I'm sure you ZHers will have even better data to calculate who is the most insolvent.

Damn, we've all been drinking. But the BAC here in NY is still better than Michigan, Indiana, and Wisconsin! Sure we're dead, but their deader!

Fri, 05/21/2010 - 23:15 | 367204 Hulk
Hulk's picture

If they would only place a 50% , before noon tax on beer sales, everything would balance out just fine...

Sat, 05/22/2010 - 07:57 | 367449 JiangxiDad
JiangxiDad's picture

 All borrowers aren't equal in terms of ability to re-pay, so not so sure where per capita will get you.

Fri, 05/21/2010 - 22:22 | 367159 waterdog
waterdog's picture

Want manufacturing jobs back in this country? Place a $500,000 port fee on all containers entering a US port.

 

Fri, 05/21/2010 - 22:31 | 367164 Apostate
Apostate's picture

That won't be necessary if China busts the peg.

I think they don't really care at this point. China keeps the peg, laughs as America gets driven into the ground, and they maintain political stability.

What do the CCP care if the debt is monetized away? They have their positions of power. All the slaves they want. Nice houses. Prestige.

It's Other People's Money.

China can buy up hard assets (as they are doing in certain communities) with the shitty dollars that Americans are forced to accept.

US fiscal policy overwhelmingly benefits China in the long-term. The Chinese factories could care less as to whether they're delivering goods to the US, Africa, or Europe.

US will need to develop some new competitive advantages. 

Sat, 05/22/2010 - 03:29 | 367367 AnAnonymous
AnAnonymous's picture

China has USD the US gives. The US sought China in order to implement the American dream.

China is buying right and left thanks to USD but mainly in third world countries. They are the ones to cope with China expansionism when this one turns more aggressive.

Dont try to depict the US as being on the short end of the stick. The US is not. On the opposite.

Sat, 05/22/2010 - 14:52 | 367806 John_Coltrane
John_Coltrane's picture

"China can buy up hard assets (as they are doing in certain communities) with the shitty dollars that Americans are forced to accept."

They should consult with the Japanese on how that worked for them in the 80s  Don't buy hard assets (mining, RE etc) when you don't control the taxing structure since your counterparty can tax them until  forced liquidation at fire sale prices as we did with the Japanese on the Pebble Beach, Rockafellar, center "ownership" fiasco.  If they don't pay their taxes they forfit the assets.  And you keep raising those taxes until they do.  Without political/military control of the assets, they aren't really yours (like the difference between physical gold stored in your safe vs GLD IOUs or cash at home vs. digital bits on your bank statement)

Sun, 05/23/2010 - 01:30 | 368317 Apostate
Apostate's picture

Just my personal opinion and from observation... I think many Chinese who come to the US do so for cultural reasons and to have more than one baby.

Many are Christians or other religious denominations.

The Japanese bought into an American economy that still had some juice. The Chinese have a lot more manpower, money, political leverage, and expansion-oriented fervor.

You could be correct, of course. Asians are considered non-entities in American politics for whatever reason.

Will that change? I'm uncertain...

Sat, 05/22/2010 - 20:13 | 368096 sethstorm
sethstorm's picture

US will need to develop some new competitive advantages.

Or use military/political ones.

 

Sat, 05/22/2010 - 01:27 | 367294 Moneygrove
Moneygrove's picture

Waterdog for president !!!!!!!!!!!!!!!!

Sat, 05/22/2010 - 15:24 | 367857 oklaboy
oklaboy's picture

great idea! Send it to Barry, he loves taaaaxes

Sat, 05/22/2010 - 15:53 | 367897 Moneygrove
Moneygrove's picture

and GOP loves sending jobs to china and india !!!!!!!!!!!!!!!! vat and ceo tax now !!!!!!!!!!!!!!!!!!!!!!

Sat, 05/22/2010 - 17:35 | 367987 faustian bargain
faustian bargain's picture

I say we place a tax on exclamation marks.

Sat, 05/22/2010 - 19:33 | 368077 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

It could work.

Mon, 01/31/2011 - 18:18 | 921977 web dizajn
web dizajn's picture

oh yes, it's only GOP sending jobs abroad :/ web dizajn

Fri, 05/21/2010 - 23:13 | 367200 SmittyinLA
SmittyinLA's picture

HEEEY those racists in Arizona aint on the list, what's up with that?

Fri, 05/21/2010 - 23:50 | 367229 RobotTrader
RobotTrader's picture

Deficits?

Who cares?  All states will be bailed out.

The Fed will simply monetize the state bonds.

And our willing creditors will continue to scarf down more U.S. Treasuries.

I mean really. 

30-yr. yields at 4.1%??

CRB Index in a full fledged freefall??

There is virtually NO INFLATION to worry about.

So the Fed has the green light to borrow and spend to infinity.

LOL.....

Sat, 05/22/2010 - 02:13 | 367336 Burnbright
Burnbright's picture

I don't get it Robo, I have seen the 10 year and its like 3.26% or some crap. WTF. Something doesn't make sense at all, watch for inflation to rear its ugly ass head very shortly and in a big way. There is no possible way that treasury yeilds should be this low for this long especially after swaps were reopened unless all the money is just being recycled back in from FED to party B back to treasuries.

Sat, 05/22/2010 - 09:15 | 367483 Crime of the Century
Crime of the Century's picture

Nah - you get it just fine. Robo is saying "eat and drink, for tomorrow we die". Everyone knows the game is unsustainable, but the current implosion makes Bailout! the summer blockbuster that has critics raving.

"Two opposable thumbs up!" - Jim Cramer

"I laughed, I cried, I hurled!" - Paul Krugman

"Who moved my cheese while I was drinking your milkshake?" - Ben Bernanke

Sat, 05/22/2010 - 00:33 | 367249 cyclemadman
cyclemadman's picture

It might be easier to track States that are not bankrupt.  I see Wyoming, Montana, North Dakota, Idaho, Utah, Nebraska, Oklahoma, New Mexico, and Texas are not on the list.

Perhapse we should form our own republic and say to Hell with the rest of the loser States.  I know there are plenty of pissed off people with guns out here.

Sat, 05/22/2010 - 01:32 | 367297 Moneygrove
Moneygrove's picture

just watch the dirt bag southern states cry for a bailout for the bp oil spill !!!!!!!!!!! they want bp drilling for oil off shore they can pay for it !!!!!!!!! loser gulf states !!!!!!!!!!!!! 

Sat, 05/22/2010 - 09:36 | 367501 mchawe
mchawe's picture

1. Texas is on the list

2. The question to ask is why is North Dakota not on the list ? Is it because they are doing something right ?

Sat, 05/22/2010 - 11:59 | 367624 Kali
Kali's picture

They have more cows than people

Sat, 05/22/2010 - 14:58 | 367817 John_Coltrane
John_Coltrane's picture

ND also has the highest student test scores and the lowest expenditure/pupil I believe.  Its a tough/hard scrabble state with the kind of individualist values that are the only hope for humanity.  The "social justice" states like CA are prime examples of the failing of central planning demonstrated by Hayek.  Life is tough, not fair.  People are vastly unequal is ability talent work ethic and "luck". 

Sun, 05/23/2010 - 13:20 | 368773 fallingman
fallingman's picture

Bank of North Dakota ... or was that a rhetorical question?

Sat, 05/22/2010 - 15:26 | 367859 oklaboy
oklaboy's picture

there isa move afoot to creates the I-35 USA. La and TX to the candian borders, and to hell wwith the rest o em

Sat, 05/22/2010 - 00:45 | 367256 Mark Beck
Mark Beck's picture

Here in Michigan the Central Government funding of unemployement benefits was occuring before the crash in 2008. So there was no real shadow or hiding for Michigan pertaining to unemployemnt benefits. Michigan's fund was depleteing around Q2 2008, if my memory is correct.

The federal loan money is used directly to pay benefits, which by the way, are taxible, after the first $2400.00 for Tax year 2009. The states are borrowing this money to pay benefits, this is made possible through legislation passed in 2007, I believe. The state will have to pay this money back with interest. However, I have never come across the exact terms of how or when this may occur.

----------

Is Michigan Bankrupt?

Not if the revenue projections are correct for the remainder of the fiscal year, ending in Oct. But..... there has been a lot of kicking the can, and unrealistic hopium for federal funds. Essentially, for the next fiscal year, Michigan will require additional funds from the federal government in order to balance its budget. A lot is riding on the FEDS forking over.

In some instances Michigan has been unable to scrape up funds even for porgrams that have 1:1 or even 4:1 federal matching. Really pathetic.

If the Federal Government passes more state aid, Michigan should be able to balance its budget for FY2011. If new money is not available, Michigan will be insolvent, unless there are massive spending cuts.

I would like to add this is nothing new for Michigan. The state has been on the brink of insolvency many times now, and has always found the money somehow.

Not to say that some of the exisitng cuts have not been deep, they have. But, nothing really ugly has happended. Like declaring bankruptcy to rip up old pension and health contracts for public employees.

----------

From myself and the artical author's, the point being made is that many states need additional federal funds before the start of FY2011 to remain solvent. This is even more accute when you consider the lack of confidence in state bonds.

Mark Beck

Sat, 05/22/2010 - 09:20 | 367488 Crime of the Century
Crime of the Century's picture

$13T on Tuesday - anyone want to start a pool on what month sees $14T?

Sat, 05/22/2010 - 15:45 | 367888 oklaboy
oklaboy's picture

Dec 10, probally 12/15, just in time for Christmas

Sat, 05/22/2010 - 01:53 | 367317 hambone
hambone's picture

Stupid Oregon - fully funding UI and now no bailout.  Now Oregon will get to help out all those who didn't fund their UI.  We're all subprime and responsible are dragged down saving the irresponsible.

Sat, 05/22/2010 - 02:06 | 367327 snarkolepsy
snarkolepsy's picture

I would not bet on California being downgraded. Just yet. I was slightly amused today when a lot of bloggers just starting twigging on how many states were borrowing from the feds. I've commented about this many times over on my blog. http://snarkolepsy.blogspot.com/2010/04/hey-germany-would-you-like-to-bail-out.html

So when bloggers said the number of states borrowing was 32, instead of 34 - (like it has been for a couple of months) I went over to the NCSL site. I was shocked to see California has paid down almost 2 billion from the amount we owed in the last 4 weeks. On April 27th we owed almost 9 bil.

I honestly don't know how they did it. Considering we came in so short with revenue in April.

Even if it's a card game, Moody's will play along.

Sat, 05/22/2010 - 17:37 | 367992 faustian bargain
faustian bargain's picture

Probably has to do with a bunch of money CA was supposed to send to municipalities, but didn't. Just guessing.

Sat, 05/22/2010 - 04:03 | 367382 youngandhealthy
youngandhealthy's picture

Most interesting to follow this ZH debate from Europe. It has all the ingredients used in the debate on Europe for the last couple of weeks.

May I conclude that the Dollar project is finished? and it will seize to exist? or that the worst affected states should leave the USD union?

Or should I conclude that a "federal" level doesn't mean a shit when it comes to the survival of a currency? it seems that the federal level in the US has as much influence over the states as the EU commission has over the single countries.

 

Sat, 05/22/2010 - 06:23 | 367414 i.knoknot
i.knoknot's picture

as of late (30years+) the idea of independent states has become a bit of a joke in the context that you speak. except, perhaps texas. heh

the only thing that i really think makes us different, is that we're the reserve currency holder, and everyone is rather stuck with that for a while.

perhaps we are seen as the least sick of the dying, and that might allow us some extra time... but the sins seem to be quite similar. not sure whether or not we'll skirt it, or merely meet the same fate later. or there will be a war to distract everyone from the inevitable reset.

as an amerikan 'little person', i can only offer "wasn't me" as consolation for this mess.

anymore, i could even argue that it wasn't "we", as in most of the sheeple here. the USgov seems to be a completely autonomous organism at this point.

Sat, 05/22/2010 - 06:55 | 367428 JiangxiDad
JiangxiDad's picture

Interesting comment, but I think you've missed the point, a bit. It's not that Europe couldn't continue to exist with a common currency and with varying levels of development  in different areas, it's that historically it hasn't. That means there's a model for european non-cooperation that's still alive.

 

Here in the states, it's been the opposite. Historically, we've acted as one, in spite of regional economic and cultural differences. So that's our precedent. The rich states have always sent more money to the poorer states via DC.  But there are two important differences now. The first is that there aren't any more rich states. And the second major difference is that our social fabric has become unglued. Red and Blue states are at cultural war with each other. We're Balkanized ethnically, linguistically, socially, politically. So if you're asking if the US would be better up splitting into two, the answer is probably yes. The same goes for Europe,except two is probably two too few :)

Sat, 05/22/2010 - 07:06 | 367434 i.knoknot
i.knoknot's picture

++

nicely put. don't think this movement has ever been so pronounced before.

Sat, 05/22/2010 - 08:59 | 367478 blindfaith
blindfaith's picture

fooie!!!! Get rid of Rupert Murdock and a few more, and you will have a lot of hate and dis-unity burn out quick. Split up the USA, well if you are in one of those land locked states with no industries, military bases, or tourist attractions...bet you'd change you tune fast.

And, what would you have the government do...have starving kids and famlies in the streets? Want to stop supporting famlies with unemployment or providing salaries to police, fire, teachers, etc who in turn spend at the merchant? Good ideas on how to end this mess are indeed welcome. But no Democrate or Rebublican wants riots in the street, both will do the same thing...keep the money flowing until a miracle happens.

You think we have problems now, wait until the fall out from this oil mess slides across this country like the black plague.

Sat, 05/22/2010 - 12:14 | 367641 harveywalbinger
harveywalbinger's picture

Puhleeeze.  Get rid of one Minister of Edutainment & Propaganda & another takes his place.  Don't kid yourself.  

 

I take issue with your assumption about the neediness of 'landlocked states'.  The coastal states do not have a monopoly over all that is goodness and has value.  

It is possible, perhaps not plausible, that our nation could split into a number of separate entities.  Politically that would mean death to the regime, & the powers that be would never allow that to happen...  If it were to happen, we'll be living in Mad Max world (at least for a while)...  And I'd like to pre-emptively declare that all you anti-gun pussies can kiss my ass.  You should have exercised your 2nd amendment right instead of working to tear it down.  Fuck off & fend for yourself.  

What valuable products & services are produced in the coastal states for consumption in landlocked states beside seafood, tourism, & debt securities?  Not much else from where I stand & future prospects there ain't looking rosy either.  The seafood business has suffered profoundly & the effects of the mess in the Gulf will be felt for a couple decades (best possible outcome).  I think it's safe to say Finance is not a growth industry in light of the positive feedback shit storm High Finance has brought upon the entire fucking world.  Tourism?  Don't think I care to visit the formerly beautiful, now black oil stained beaches of Florida anytime soon (coming to a beach near you soon east coast).  

The landlocked center of the country benefits from a relative high ratio of natural resources per capita as compared to most of the coastal states.  These states grow the food that is staple of much of the worlds diet:  corn, soybeans, wheat, etc...  They raise cattle.  They pump oil AND refine it...  Water is readily available & rationing isn't an immediate concern with few exceptions.  Landlocked 'hick' states, where most of the food you eat comes from, aren't as needy as folks in polite society would have you believe.  Poor folks in the mega-cities will understand what this means when all the coin op 'food' dispensers they were relying on for sustenance are empty & no semi-trucks arrive with the goods to fill em back up.  Truth be told, middle America doesn't need your ass nearly as much as you need what they have to offer.  

No one wins this game, but land-locked states have resources in proximity to ensure that meeting basic needs isn't as much of a concern.  Perhaps a real estate boom in landlocked states comes next, as record numbers of city folks discover the US Constituion & turn right wing ultra conservative religious self sufficient tea party survivalists (as stereotyped on CNBS). 

 

You believe the gubmint must continue to spend to take care of people because they've grown up unable to do so for themselves.  All this does is continue the debt cycle.  Good luck with that.   It can't go on much longer.  When the curtain falls & Oz is revealed, how many will accept out in the open totalitarian rule?  The only way out is for people to accept responsibility for themselves & make due.  That's the conclusion to this story regardless:  free society or not.  It makes more sense to me that each should impose their own 'austerity' measures on himself (i.e. stop buying shit you don't need) rather than have it imposed upon me by big brother.  Too late now though.  Our turn coming soon enough.  

In a resource crisis, the federal gubmint would probably look at the states in the middle of the USA much as they look at the middle east & invent a bullshit rationale for invasion "to counter terrorist activity" or some other bullshit, since the world revolves around the needs & whims of DC.  The plans have probably already been drawn.  

 

Every time I consider prospects for the future, I reach the conclusion that no favorable outcome is possible.  

Sat, 05/22/2010 - 15:35 | 367872 oklaboy
oklaboy's picture

great point, we have had discussions here in OK with TX and LA about the I-35 USA. No taxes, our owe ports, we get the Mississippi river, access to Canada. Tax everything crossing us going to the coasts, and Frif em. There Friggin us, why not.

Sat, 05/22/2010 - 09:22 | 367490 Crime of the Century
Crime of the Century's picture

the Dollar project is finished? and it will seize to exist?

Unintentionally profound?

Sat, 05/22/2010 - 07:03 | 367432 jkruffin
jkruffin's picture

I knew N.C. had to be in the top 5 or 6, and low and behold there it is at 6th.  This state loves free gubment cheese and money.

Sat, 05/22/2010 - 07:32 | 367441 Irwin Fletcher
Irwin Fletcher's picture

According to an article from Dec 2009 citing a report by the National Conference of State Legislatures, Oklahoma's 18.5% budget shortfall is #1.  Take that, California.

http://www.allbusiness.com/government/government-bodies-offices-regional...

Sat, 05/22/2010 - 07:46 | 367445 JiangxiDad
JiangxiDad's picture

Just a thought: Suppose every household in OK had to pay an additional 1000 dollars in taxes to rectify the shortfall. Further suppose every household in CA or NY or MI had to do the same, or make it even $900. My guess is that OK could do it, and the others, no way! So "per capita" isn't the same from country to country,or state to state. It has something to do with exactly which "capita" we're talking about.

Sat, 05/22/2010 - 08:28 | 367462 lawton
lawton's picture

I agree some of the worst off states are already taxed like crazy and it would just make more people move out of that state probably.

Sat, 05/22/2010 - 20:16 | 368098 sethstorm
sethstorm's picture

You presume that people can afford to move out of the state.  Never mind about opportunities.

 

Sat, 05/22/2010 - 15:38 | 367877 oklaboy
oklaboy's picture

you may wanna read the date on the article. OK just passed the budget, balanced and funded. And we still have some cash left in the rainy day fund, noty much, but what other state has cash left over?

Sat, 05/22/2010 - 15:56 | 367903 Moneygrove
Moneygrove's picture

Ok is a joke state !!!!!!!!! how many people like in ok ?????????? please my ex is from yukon,ok !!!!!!!!!!!!!

Sat, 05/22/2010 - 08:24 | 367460 lawton
lawton's picture

Here in Florida they passed a bill delaying businesses paying an increase in unemployment taxes for a year. For some reason I think things will be no better a year from now but unlike some of those other states Florida is making some real cuts at the state level and not just kicking the can down the road like California and Illinois etc.

Sat, 05/22/2010 - 08:34 | 367468 cossack55
cossack55's picture

Our legislature in Indiana did the same this year (see posts above re:Colts).  Their boot size is only exceeded by their piehole size.

Sat, 05/22/2010 - 08:37 | 367469 blindfaith
blindfaith's picture

by the way, how does Marco Rubio go from making 36K to over 400K in one year with NO JOB???? Did he get an advance on the Governors salary????

Sat, 05/22/2010 - 08:47 | 367472 lawton
lawton's picture

You mean Senator's salary ? Rubio is just riding the tea party movement. I think he will say anything to get elected like most of them. If being a RINO was still in he would act like a RINO.

Sat, 05/22/2010 - 08:32 | 367466 blindfaith
blindfaith's picture

not to worry folks. The states will hire Goldman to bundle up the debts and sell them to the Greeks who will use them as collateral on loans from the IMF at 3X value. The IMF will inturn use them as a trade with the FED for 3x value. And the FED will mark them at 36x value on their "balance sheets" as an asset! What goes around, comes around...easy piezzie, everyone makes money!

Sat, 05/22/2010 - 11:23 | 367597 seventree
seventree's picture

Thanks to the aptly yclept blindfaith, my mind is at ease now and I can go back to sleep... funny looking pills probably helped...

Sat, 05/22/2010 - 10:10 | 367535 IthinkMyHeadsGo...
IthinkMyHeadsGonnaExplode's picture

Out here in California they plan on fixing the problem this way in November:

http://www.youtube.com/watch?v=P6XIhSgAuOY

Sat, 05/22/2010 - 10:34 | 367552 No One
No One's picture

The sooner people realize that California can not be fixed with its current constitution, the sooner we may get out of this. It is my opinion that California needs a new constitution. Period. Get rid of Prop. 13, Prop. 98, etc. We need 67% of the votes in the Senate and Assembly to pass a budget?!?!?! I really don't know why we need a legislature when all they do is put shit on the ballot.

 

It is time to end the ease of which propositions get on the ballot. California is direct democracy gone wrong. The people will ALWAYS vote for tax cuts and spending increases. Hell, we approved a 18B bond measue to STUDY a high speed rail.

 

 

Sat, 05/22/2010 - 11:04 | 367574 Rainman
Rainman's picture

Sadly, no constitution can trump unbridled incompetence and corruption. Implosion and reconstruction would surely change things for Kali.....but the only real hope is that legalized reefer exports will lead all Kalifornicators to the pot of gold come November.

Sat, 05/22/2010 - 11:39 | 367613 No One
No One's picture

dude, your killing my buzz!!

 

:)

Sat, 05/22/2010 - 15:41 | 367885 oklaboy
oklaboy's picture

lllllllllliiii"""""" _____

Sat, 05/22/2010 - 10:26 | 367548 Mitchman
Mitchman's picture

And speaking of bankrupt government entities, not prosecution of Cassano:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aaGo3bTE5t7E&pos=2

Sat, 05/22/2010 - 11:17 | 367591 special K
special K's picture

How can the US.Dollar collapse if there is no accounting for its output at the Federal Reserve?For example: if I was Bernanke and I wired someone a million dollars and the bank said nothing,how would that change anything?
This is whats being done on a grand scale with trillions of dollars and because the beneficiaries say nothing;the effects are dismal at worst case scenario.

Sat, 05/22/2010 - 11:24 | 367598 3ringmike
3ringmike's picture

quadrillion quintillion sextillion octillion nonillion decillion undecillion duodecillion tredecicillion quattuordecillion What"s the big deal? There just more zeros.

Sat, 05/22/2010 - 12:02 | 367627 Tic tock
Tic tock's picture

I just realised- with a transparently guarded infosys admin- ZeroHedge is the archetype for Direct Govt. Perhaps ZH coulod bury the Hatchet and get Goldman to fund them for running a campaign? -no, seriously

Sat, 05/22/2010 - 12:47 | 367669 Grand Supercycle
Grand Supercycle's picture

 

The March 2009 lows won't hold.

Updated DOW daily and weekly charts:
 
http://stockmarket618.wordpress.com

http://www.zerohedge.com/forum/latest-market-outlook-1

Sat, 05/22/2010 - 13:54 | 367731 DosZap
DosZap's picture

Wonderful,the master plan is proceeding........

In payment for the BAIL OUT's, the Admin will seize all lands in each of these states(already not owned by the Federal Gv't), as payback.

Genious.

Damn glad I live in Texas......the state should not be on the list..........

We have a 16 Billion Rainy Day fund, to fall back on.

However the deficit (Budget Shortfall for 2011 is expected to hit 18B), which could easily be handled with a $.03-$.05 increase in gasoline..........

Sat, 05/22/2010 - 15:57 | 367905 Moneygrove
Moneygrove's picture

Texas sucks and so does bushs buddy jeff gannon !!!!!!!!!!!!!!!

Sat, 05/22/2010 - 20:10 | 368094 jbcorwin
jbcorwin's picture

It's why all of us who work for the state are taking "haircuts" and furloughs. The Texas budget, by law, has to be balanced YIYO.

We'll be fine.

Sat, 05/22/2010 - 14:21 | 367769 davidhur
davidhur's picture

These states and the Federal gov't would be better described as bankrupt but solvent. In this context "bankrupt" indicates that the entity has an excess of liabilities vs assets whereas "solvent" indicates that the entity is actually paying its obligations when due. For example, the Fed gov't has current liabilities of about      $ 15 trillion excluding the about $ 6 trillion of GSE debt that doesn't appear on the US Treasury balance sheet. And, the Fed gov't also has about $ 45 trillion in "actuarial present value" of so-called unfunded liabilities offset by projected future revenue that applies to the former using its 75 year horizon. The US Treasury document as of 10-31-1009 at the following site thus makes plain that the Fed gov't debt ($60 trillion vs 2010 projected GDP of        $ 14.6 trillion) yields a ratio of about 404% and thus among the worst such ratios in the world now: http://www.fms.treas.gov/fr/09frusg/09frusg.pdf

Sat, 05/22/2010 - 14:35 | 367780 frank
frank's picture

California, Michigan, and New York...... sounds familiar....

"A state-by-state breakdown shows New York lawmakers in 2007 were paid the third highest annual base salary at $79,500, according to the latest NCSL salary figures. Only lawmakers in California and Michigan were paid more."

http://www.empirecenter.org/html/legislative_salaries.cfm

 

 

Sat, 05/22/2010 - 19:32 | 368076 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

And with a "strong" doelarr (85?) we can pay China the money we owe them.

"Damn you China!" -Paul Krugman

Sun, 05/23/2010 - 12:51 | 368726 Problem Is
Problem Is's picture

Excellent post "Analytical" Tyler
Any evidence on additional backdoor bailouts that you mentioned?

Obummer Just Loves the Backdoor:

1. HAMP, HARP and HUMP
Screw the Amerikan Public backdoor Bankster Bailout.

2. Health Care "Reform"
Screw the Amerikan Public Health Insurance Corporate Welfare Ho Plan

  • You Amerika! You buy shitty insurance at higher prices or the IRS will take your tax return.
  • Prediction: By 2014 a year after this kicks in... Obummer will be the most hated bitch in Amerika...

3. Wall Street "Reform"
BBBAAAHHH-HAH-Hah-ha-ha-a-ha!!

  • "Reform" is about as likely as that fat fucking Dodd having a spine and Barny Frank having a Robo type girl friend...
Sun, 05/23/2010 - 14:39 | 368889 clichy
clichy's picture

Nice. Sixty-four percent of the states are bankrupt and we're going to continue throwing money at banks and irresponsible corporations while allowing this little prick in the White House to make a stealth attack on Social Security with the help of Peter Peterson and a-holes like Alan Blinder.

I'm sick of this class warfare being waged against me with no mentioning a peep about it for what it is. We'll run in circles condemning the racist code of Rand Paul meanwhile the rest of us are going to be forced to eat cat food if Obama's commission gets its way in December.

Fri, 06/17/2011 - 20:22 | 1379193 sun
sun's picture

Dude, the Star Wars is cracking me up. Thanks for the great post, these are my fav so far. xbox 360 slim

Sun, 06/26/2011 - 10:26 | 1402780 sun
sun's picture

I found lots of interesting information here. The post was professionally written and I feel like the author has extensive knowledge in the subject. Keep it that way sports degrees

Mon, 07/11/2011 - 01:30 | 1442764 john310
john310's picture

The absolute funniest part of this whole thing is watching the pols scramble to try to manage the economy, which is, of course, impossible. What is revealing about it is this: they still have their heads stuck firmly in the old paradigm, the one they grew up with, inculcated in them by Greenspan, that the Fed has always got their backs, that the system can go on forever based on lies and borrowed moneyscbcd dumps/scmad dumps//VCP-410 dumps/640-802 dumps/70-680 dumps/000-118 dumps/1Y0-A19 dumps/E22-275 dumps/000-978 dumps/000-107 dumps

Mon, 07/11/2011 - 14:51 | 1444841 hama
hama's picture

I found lots of interesting information here. The post was professionally written and I feel like the author has extensive knowledge in the subject. Keep it that way....
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Wed, 07/13/2011 - 07:40 | 1450987 hama
hama's picture

"A state-by-state breakdown shows New York lawmakers in 2007 were paid the third highest annual base salary at $79,500, according to the latest NCSL salary figures. Only lawmakers in California and Michigan were paid more."
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Thu, 07/14/2011 - 05:40 | 1455272 hama
hama's picture

It's certainly time for domestic banks to start mimic the creativity of foreign banks when it comes to bringing great services to its customers. The domestic banks need to bring their ideas out of their golden labs and right in front of the public, in form of new and exciting mix of services. Eventually they will be forced to do it.
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Tue, 08/16/2011 - 01:00 | 1564249 newdeals2
newdeals2's picture

the unholy trifecta of California ($6.9 billion borrowed), Michigan ($3.9 billion), and New York ($3.2 billion). With this form of shadow bailout occurring, one can only wonder how many other shadow programs are currently in operation to fund states under the table with federal money.The full list of America's 32 insolvent states is below, sorted in order of bankruptedness. Pass4sure 310-200 | Pass4sure 642-533 | Pass4sure 642-611 | Pass4sure 642-691 | Pass4sure HP0-D08 | Pass4sure 000-118 | 642-457 | Pass4sure 650-568 | Pass4sure 642-731 | Pass4sure 350-050 |

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