• Sprott Money
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Brown Brothers Warns On Deterioration In State And Local Government Deficits, Cautions Of Comparable European Collapse

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Mon, 06/21/2010 - 11:44 | 424999 Turd Ferguson
Turd Ferguson's picture

First the Bank of Canada and now this?!? I can't stand all the good news! I must get in this market!

BUY! BUY! BUY! I don't care what. REITS, AAPL, the ES!!! BUY! BUY! BUY!

Mon, 06/21/2010 - 13:42 | 425188 Oh regional Indian
Oh regional Indian's picture

Hey Turd and Zero and TD and all you "in the know"ers.

I've been following an interesting story for a few months now that I even posted about earlier when CaliBLOWnia and it's pathetic fiscal situation had come up over the past few months.

Have you all read or heard about CAFR? The true state of state finances, with billions socked away?

Check it out @

http://cafr1.com/

Is it true? Why no noise?

ORI

http://aadivaahan.wordpress.com

Mon, 06/21/2010 - 11:46 | 425001 HarryWanger
HarryWanger's picture

Funny, I was just reading this California on 'verge of system failure’ when you posted. 

I hope all those Californians own AAPL stock.

http://www.theglobeandmail.com/report-on-business/economy/california-on-...

 

Mon, 06/21/2010 - 12:37 | 425090 jkruffin
jkruffin's picture

Borrowing more and government bailouts do not solve this problem ever.  This is a result of exporting all your production overseas, and not investing in your infrastructure.  The entire US has not put any money into infrastructure in many many years.  This is a result of letting millions of illegals leech off citizens.  It is a result of fantasy land economics.  This is a result of spending trillons of dollars on other countries' well being and building their infrastructure and bailing them out at our expense. 

Oh my, where we could be today if we hadn't wasted all that money over the years.  Heck, we might have a national transit system, or something better.  It is too late now.

 

 

Tue, 06/22/2010 - 09:06 | 426504 TexasAggie
TexasAggie's picture

A long time ago (as my daughter's say - when the dinos roamed the earth), I did a rate study for a multi-utility in Texas providing water to several cities.  They had in their rate, funds for a sinking fund to repay the bonds as the bonds matured. This then did not come out of the general fund.

In Civil Engineering - Engineering Economics that was always a requirement.

Did cities raid these funds to keep from raising taxes to support the general fund?

If the SF is present as the bonds are paid off, more bond could be sold to help restore the water lines (other infrastructure) and the current rates should allow the replacement.

 

Mon, 06/21/2010 - 12:00 | 425024 breezer1
breezer1's picture

"stay thirsty my friend".

Mon, 06/21/2010 - 12:00 | 425026 I need more asshats
I need more asshats's picture

The only way to solve the pain from bloat is to increase taxes. This will further reduce discretionary funds. Property tax mill rates will have a crippling bias toward punishing the 'nice neighborhoods'.

When Kernen was questioning Meredith this morning about consumer spending I just shook my head in disbelief. What a group of clowns the cheer leading crew is. Clowns.

Mon, 06/21/2010 - 12:30 | 425078 Mad Max
Mad Max's picture

Around here, any increase in tax rates seems likely to spark a rebellion.

I see local govts finding a form of deficit spending and some really sneaky "revenue enhancements," followed by a fiscal explosion and perhaps near collapse of many local governments.

Mon, 06/21/2010 - 12:01 | 425027 digalert
digalert's picture

CA lawmakers have the answer: "we need more revenue" idiots

Mon, 06/21/2010 - 18:14 | 425657 Rainman
Rainman's picture

Arnie's got the answer on revenue. He's already blown off the Cali job for a side gig. He and Sly Stallone have a new movie coming out.

I think he'll donate his end of the box office to rid Cali of its deficit. Then he can go out with his head held high.

Mon, 06/21/2010 - 12:02 | 425029 MsCreant
MsCreant's picture

No one is putting the oil spill into their projections. I wonder why? Just because you cannot know precise numbers does not mean it should not factor into these bearish kinds of discussions. States and cities are going to suffer losses of revenues from business and tourism being down, and paying people to clean up, buy equipment, etc. 

Mon, 06/21/2010 - 16:51 | 425543 I need more asshats
I need more asshats's picture

Have you research Exxon stock price on and around March 24, 1989?

Granted this spill is a different kind of kitty cat, oops I mean a different kind of oil spill in terms of net potential damage awards. But Exxon's stock price behaved very differently than BP's.

Tue, 06/22/2010 - 00:40 | 426219 MsCreant
MsCreant's picture

Folks, 

I need an honest opinion. Does my "ass" look ugly? No matter how hard I work on it I can't seem to get rid of it (see #425543). If ya'll think he is cute, I'll keep him (why wouldn't a girl want a good looking ass?). 

Tue, 06/22/2010 - 01:55 | 426310 Hephasteus
Hephasteus's picture

LOL one of my uncles has donkeys. They are so much fun and so great to be around. Horses and donkeys bite you as a bonding practice. They stand front to back and bite each other on the necks. So an hour with them is pretty much like a 6 months of puppy chewing.

At some point in it all you start thinking. Ok. I'm going to give this damn donkey a bath and just chew the shit out of his neck till he finally understands ok yes I'll herd up with you.

Tue, 06/22/2010 - 10:12 | 426612 MsCreant
MsCreant's picture

This is really funny. I did not know this about donkeys but it very much suits the spirit of the post. Cats do this too. Mine will nip me (no real hurt) and then run like hell through the house hoping I will follow in a fit of mock rage. 

Mon, 06/21/2010 - 12:03 | 425030 jkruffin
jkruffin's picture

Gee, wonder how this helps the economy?  People bailed out need a bail out. 

 

http://finance.yahoo.com/news/More-borrowers-exit-Obama-apf-887634101.ht...

Tue, 06/22/2010 - 04:51 | 426364 StychoKiller
StychoKiller's picture

[quote]Requiring homeowners to provide documentation of income has turned people away from enrolling in the program.[/quote]

Ha!  Bluffers got caught with a bust hand!

Mon, 06/21/2010 - 12:05 | 425042 Joe Shmoe
Joe Shmoe's picture

Policy response to excessive government spending and financial crisis in Europe are exactly what caused teh big time double dip in the 30s. 

Mon, 06/21/2010 - 12:11 | 425052 chet
chet's picture

"This sucker could go down."

Mon, 06/21/2010 - 12:23 | 425067 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

A W. quote on the Brown Brothers article; brilliant!

Was Dubya speaking about Jeff Gannon or the market?

Mon, 06/21/2010 - 12:14 | 425055 crzyhun
crzyhun's picture

There is so much that is under the radar that it is a virutal ant hill. Sorry for the mixed metaphor. Again, we have the number one law to recall....the law of unintended consequences or the road to hell is paved with unfunded gov't largess.

 

Tue, 06/22/2010 - 04:55 | 426366 StychoKiller
StychoKiller's picture

Yet, what's mind boggling to me is how so many clutch at straws to prove that all is well, "as the dominoes fall -- checkmate!" [Zap Brannigan]

Mon, 06/21/2010 - 12:21 | 425063 bugs_
bugs_'s picture

They have been fighting the fall since 2001 and it won't be denied.

Mon, 06/21/2010 - 12:24 | 425068 Dr. Richard Head
Dr. Richard Head's picture

I went to the local Village COuncil Meeting after the council decided to put a 1% income tax on residents NOT working in the Village.  I was apparently the only village idiot there.  After reviewing the village's financials, their insolvency was immediately recognizable and the $330,000 plus deficit for a village of 2,000 or so was a good display of what cities, towns, and villages are all going through.

At least here in Ohio the council was excited about the prospect of being able to ticket motorists without having to have a radar reading.  They gleefully believe the 1% income tax increase, increased ticket writing, and only a 2% raise for the tax feeders would alleviate their problems. HAHAHAHA

Mon, 06/21/2010 - 12:28 | 425072 wafflehead
wafflehead's picture

the solution to budget problems is laying off public employees and cut pensions.

I know for sure in the police department we can do the same quality of service with less people. There is no reason why when there is an accident 5 or more police cruisers show up. Complete waste of tax payers money.

Mon, 06/21/2010 - 12:33 | 425083 MaximumPig
MaximumPig's picture

California and other states in trouble could easily solve their fiscal problems by legalizing and taxing marijuana (if not all illegal narcotics).  In fact, Cali has a referendum on it this November--not medical marijuana, which they already have, but outright decriminalization for everyone.

Once Cali taps into the sales tax revenue on an estimated $14bn/year market (which is the size of the semi-legit medical marijuana industry in Cali alone), and issue $50 billion of "recovery" pot bonds, every other state and local government in the union is going to want a piece of that action. Not to mention the drop in costs of law enforcement and incarceration.

In other words, watch as inexorable economic forces wash over and erase cultural taboos.

Call it Munijuana.

 

Mon, 06/21/2010 - 12:40 | 425092 JLee2027
JLee2027's picture

Yeah right, keep dreaming.

Mon, 06/21/2010 - 15:54 | 425391 MaximumPig
MaximumPig's picture

Fact is, there will be a referendum on the ballot, so we'll just see what happens in November.

Mon, 06/21/2010 - 13:26 | 425165 Bam_Man
Bam_Man's picture

Yeah, and think of all the "jobs" it will create in bong manufacturing, as well as the addiction counseling and medical de-toxification fields.

I can see it now (through the smoky haze): "The Stoner Economy".

Mon, 06/21/2010 - 14:30 | 425270 aerojet
aerojet's picture

I'd rather have that stoner economy than the fascist militarized police state one we have been working on since the 1970s.

Mon, 06/21/2010 - 17:30 | 425602 tip e. canoe
tip e. canoe's picture

agreed.   willie nelson for president.

Mon, 06/21/2010 - 18:51 | 425711 Mr Lennon Hendrix
Mr Lennon Hendrix's picture
This joke goes for America as well. Joe Rogan Solves the War with Pot:

http://www.youtube.com/watch?v=W6cZdSJvOME

Tue, 06/22/2010 - 01:51 | 426306 tip e. canoe
tip e. canoe's picture

cue the flying squirrels!

Mon, 06/21/2010 - 12:41 | 425086 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Brown Brothers Harriman laundered money for Fritz Theissen, who was the main funder of the Nazi party.  They also owned and operated Amerika Shipping Lines and Amerika Mining (correct spelling) in Germany while the Nazi party was being established.  Averell Harriman was known as the founder of the new Democratic party and his wife was the Chief fundraiser.  Averell held many upper level cabinet positions both before after WWII, notably US Ambassador to the Soviet Union during WWII, US Ambassador to Britain after the war,  Secretary of Commerce under Truman, and Governer of NY.  Prescott Bush acted as President while the bank was laundering the Nazi money; he was charged with the 'Trading with the Enemies Act' during WWII, before he became Senator of Connecticut.  He was also one of Ike's favorite golfing buddies.  Averell's brother "Bunny" was the main shareholder of the bank.  George Herbert "Bert" Walker become CEO of said bank, this while establishing himself in NYC during the "roaring 20's".  He was an enthusiastic sportsman; he established Madison Square Garden and was in charge of the PGA, thus the 'Walker Cup'.  Prescott married Bert Walker's daughter, and passed down the family name to his eldest son, who did the same.  All three men (Averell '13, Bunny '17, Prescott '17) were Scull and Bones at YALE University, respectively.

Oh, and of course I will add, the Doelarr is dead.

Mon, 06/21/2010 - 12:42 | 425094 Turd Ferguson
Turd Ferguson's picture

House of Bush, House of Saud?

Mon, 06/21/2010 - 12:46 | 425097 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Absolutely.  The former swing oil producer was thought of as family.

http://media.photobucket.com/image/bush%20saud/yolhuani/activism/politic...

Mon, 06/21/2010 - 13:09 | 425146 LeBalance
LeBalance's picture

The roots (sorry) of BBH go way back to slavery in RI and Baltimore and before.  They are much more of a driver and much more insidious than many orgs we all shudder at the names of.

The Walker (Windsor) Bush Family is, but one of their arms.  The most public.

Mon, 06/21/2010 - 13:08 | 425145 Escapeclaws
Escapeclaws's picture

I don't know who flag you as junk, but everything you say about BBH is backed up by Kevin Phillip's book on the Bush dynasty. Kevin Philips is no radical rabble-rouser.

Mon, 06/21/2010 - 14:37 | 425279 aerojet
aerojet's picture

That pretty much sums up what our problems in the US are.

Democracy is such a waste of breath.

Mon, 06/21/2010 - 12:47 | 425099 aaronb17
aaronb17's picture

I'm not trying to advocate big government, but the comparison of pay per employee for government versus private industry makes no sense to me.  There is a huge range of employers in the private sector. 

What are average government wages compared to comparably-sized entites (if there are any)?   For example, a government IT worker v a Microsoft IT worker with the same or similar duties. 

That would seem to be a better comparison.  This idea that government employees are highly paid compared to the private sector is entirely new to me.   It's certainly not the case at higher management/professional levels.  If it's the case at lower levels, it's only because government generally doesn't dredge the bottom of the employment barrel to reduce the bottom line, the way the private sector employers often do when they're pressured to show growth.

Tue, 06/22/2010 - 05:00 | 426368 StychoKiller
StychoKiller's picture

Compared to private sector productivity, most public employees are extremely overpaid!  Go to any large city DMV and see for yourself.

Mon, 06/21/2010 - 12:47 | 425100 bigdumbnugly
bigdumbnugly's picture

I would like to submit that California is welcome to the sage advicement of our New York State legislature if they are so inclined.

Oh, never mind, the two are already of one mind.  Does that make them half-wits?

 

 

Mon, 06/21/2010 - 12:59 | 425121 Almost Solvent
Almost Solvent's picture

Instead of a yearly budget, NYS is passing one WEEK budgets.

One week is all NYS can afford to fund at this time.

ONE WEEK!!!!!!

NYS is now living (tax)paycheck to (tax)paycheck just like many households, assuming they even still have a paycheck.

Otherwise it's living gov't benefit check to gov't benefit check!

Mon, 06/21/2010 - 13:01 | 425126 Turd Ferguson
Turd Ferguson's picture

So SELL YOUR GOLD! 

Mon, 06/21/2010 - 12:56 | 425113 Xibalba
Xibalba's picture

"The essay does warn that the cutbacks by state and local governments will retard the US economic recovery for the next year or two." -or 10 or 12. 

Mon, 06/21/2010 - 14:12 | 425239 Hephasteus
Hephasteus's picture

Or give it the nastiest case of ecephalitis ever seen and we will watch the puss run from it's ears and eyeballs for 3 years.

Retardation. Hah. This thing is heading for vegetative state.

Mon, 06/21/2010 - 13:14 | 425150 Escapeclaws
Escapeclaws's picture

As usual,

no discussion of our bloated military or why we seem to be incapable of not waging at least two economy-sucking wars at the same time. How much has Iraq cost, $2 Trillion?  We didn't even get the goddamned oil. What about Afganistan $1 Trillion? How much have our 700 bases cost us over the last 10 or 15 years. Why is there never a cost benefit analysis of our miltary expenditures? Because there are all costs and no benefits.

The 401K as a replacement for the defined benefit pension was and is nothing but a scam. Who has benefited the most from that? Hint: not retirees.

 

Mon, 06/21/2010 - 15:16 | 425330 Steaming_Wookie_Doo
Steaming_Wookie_Doo's picture

Ah, sadly the military-industrial complex is doing exactly what it should be. The cost/benefit for Halliburton et al are stellar and with no defined goal or ending, they can count on the gravy train continuing.

There is no intention to have cheap oil, since you can't shore up the profits if it's easily available to poor schmucks with long commutes. Part of the strategy is denial of commodities and relationships for China (or practically anyone else).

But I agree that it is sickening and stupid to the nth degree.

Mon, 06/21/2010 - 13:15 | 425154 Mercury
Mercury's picture

Who knows offhand what the size ratio of federal to state and local government is in the US as opposed to a typical EU country?  In other words if you live in France, Germany or Spain how big a of a presence in your life (and in your taxes) is non-federal government?

I'm guessing non-federal government -municipal government- is much bigger in the US and therefore the US is at risk of a type of crisis that isn't as big an issue in Europe: government insolvency by governments that aren't able to print or muscle their way to the next coupon payment.

The Feds could try and support the munis to an even greater extent than they are now of course but (hopefully) that will be hard to pull off politically.  Although I'm sure Obama would prefer to have the Feds control all government everywhere.

Mon, 06/21/2010 - 14:10 | 425234 Apostate
Apostate's picture

The US government is by far the largest, most socialistic, and most violent in the world on a size basis.

Also the most indebted. The US situation is way worse than in the EU. Anyone who claims that it's just a European problem is projecting.

One more print-a-thon, then they all fall down.

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