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Meredith Doubles Down: Move Over Munis, Here Comes The "Hidden State Financial Crisis"

Tyler Durden's picture




 

There are those who thought that following the material pushback by every chatterbox on CNBC that the muni situation is actually nice to quite nice, contrary to what Meredith Whitney had prophesied, that the scourge of Citi would slink back into whatever hole it is she crawled out of. And then there is Meredith Whitney, whose occasional appearances on TV have resulted in 25 weeks of consecutive, and material outflow from municipal funds. Undaunted by her critics, she has now doubled down, and shifting away from munis, is now focusing one level higher: on the state financial crisis. Her conclusion, sure to set off a firestorm of angry responses tomorrow when the Op-Ed hits the print version of the WSJ: "Defaults in a variety
of forms by states and municipalities are already happening and more
are inevitable. Taxpayers have borne the initial brunt of these defaults
by paying higher taxes in exchange for lower social services. And state
and local government employees are having to renegotiate labor
contracts that they once believed were sacrosanct." And sure enough, she refuses to abandon her muni thesis: "Municipal bond holders will experience their own form of contract
renegotiation in the form of debt restructurings at the local level.
These are just the facts. The sooner we accept them, the sooner we can
get state finances back on track, and a real U.S. economic recovery
underway." Yes, well, one can argue that the sooner Ms. Whitney accepts that the modus operandi in the developed world is to preserve the status quo no matter the cost, and kick the can down the road indefinitely, the sooner we can all get back to a state of vegetative existence in which nobody questions anything and the world is one swell place until everything blows up.

Meredith Whitney: The Hidden State Financial Crisis, posted in the WSJ

Next month will be pivotal for most states, as it marks the fiscal
year end and is when balanced budgets are due. The states have racked up
over $1.8 trillion in taxpayer-supported obligations in large part by
underfunding their pension and other post-employment benefits. Yet over
the past three years, there still has been a cumulative excess of $400
billion in state budget shortfalls. States have already been forced to
raise taxes and cut programs to bridge those gaps.

Next month will also mark the end of the American Recovery and
Reinvestment Act's $480 billion in federal stimulus, which has
subsidized states through the economic downturn. States have grown more
dependent on federal subsidies, relying on them for almost 30% of their
budgets.

The condition of state finances threatens the economic recovery.
States employ over 19 million Americans, or 15% of the U.S. work force,
and state spending accounts for 12% of U.S. gross domestic product. The
process of reining in state finances will be painful for us all.

The rapid deterioration of state finances must be addressed
immediately. Some dismiss these concerns, because they believe states
will be able to grow their way out of these challenges. The reality is
that while state revenues have improved, they have done so in part from
tax hikes. However, state tax revenues still remain at roughly 2006
levels.

Expenses
are near the highest they have ever been due to built-in annual cost
escalators that have no correlation to revenue growth (or decline, as
has been the case recently). Even as states have made deep cuts in some
social programs, their fixed expenses of debt service and the
actuarially recommended minimum pension and other retirement payments
have skyrocketed. While over the past 10 years state and local
government spending has grown by 65%, tax receipts have grown only by
32%.

Off balance sheet debt is the legal obligation of the state to its
current and past employees in the form of pension and other retirement
benefits. Today, off balance sheet debt totals over $1.3 trillion, as
measured by current accounting standards, and it accounts for almost 75%
of taxpayer-supported state debt obligations. Only recently have states
been under pressure to disclose more information about these
liabilities, because it is clear that their debt burdens are grossly
understated.

Since January, some of my colleagues focused exclusively on finding
the most up-to-date information on ballooning tax-supported state
obligations. This meant going to each state and local government's
website for current data, which we found was truly opaque and without
uniform standards.

What concerned us the most was the
fact that fixed debt-service costs are increasingly crowding out state
monies for essential services. For example, New Jersey's ratio of total
tax-supported state obligations to gross state product is over 30%, and
the fixed costs to service those obligations eat up 16% of the total
budget. Even these numbers are skewed, because they represent only the
bare minimum paid into funding pension and retirement plans. We
calculate that if New Jersey were to pay the actuarially recommended
contribution, fixed costs would absorb 37% of the budget. New Jersey is
not alone.

The real issue here is the enormous over-leveraging of
taxpayer-supported obligations at a time when taxpayers are already
paying more and receiving less. In the states most affected by
skyrocketing debt and fiscal imbalances, social services continue to be
cut the most. Taxpayers have the ultimate voting right—with their feet.
Corporations are relocating, or at a minimum moving large portions of
their businesses to more tax-friendly states.

Boeing is in the political cross-hairs as it is trying to set up a
facility in the more business-friendly state of South Carolina, away
from its current hub of Washington. California legislators recently went
to Texas to learn best practices as a result of a rising tide of
businesses that are building operations outside of their state. Over
time, individuals will migrate to more tax-friendly states as well, and
job seekers will follow corporations.

Fortunately, many governors are addressing their state's structural
deficits head on. Unfortunately, there is a lack of collective
appreciation for how painful this process will be. Defaults in a variety
of forms by states and municipalities are already happening and more
are inevitable. Taxpayers have borne the initial brunt of these defaults
by paying higher taxes in exchange for lower social services. And state
and local government employees are having to renegotiate labor
contracts that they once believed were sacrosanct.

Municipal bond holders will experience their own form of contract
renegotiation in the form of debt restructurings at the local level.
These are just the facts. The sooner we accept them, the sooner we can
get state finances back on track, and a real U.S. economic recovery
underway.

 

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Tue, 05/17/2011 - 20:32 | 1285363 The Feds Connection
The Feds Connection's picture

All this doom. I watched max keizer show on 24france yesterday. Taped on 28 oktober 2009 in which he sayd financial catastrophe would hit again in in 6-9 months. How long can this be stretched?

Tue, 05/17/2011 - 20:36 | 1285369 FunkyMonkeyBoy
FunkyMonkeyBoy's picture

"How long can this be stretched?"Many a man has had the same thought.

Tue, 05/17/2011 - 20:48 | 1285410 Sgt.Sausage
Sgt.Sausage's picture

I see what you did there.

 

Wed, 05/18/2011 - 05:11 | 1286325 cossack55
cossack55's picture

Funny.

+867

Wed, 05/18/2011 - 09:41 | 1286707 squib
squib's picture

+5309

Tue, 05/17/2011 - 20:39 | 1285371 The Feds Connection
The Feds Connection's picture

http://www.youtube.com/watch?v=-IunmW3wI5Q 

 

Whatcha gonna do? i dont know! Just some lyrics. check it out,

Tue, 05/17/2011 - 21:26 | 1285599 max2205
max2205's picture

Oh no seal team 6 is flying to discuss this with Osama Whitney. With any luck at all the helo will malfunction

Tue, 05/17/2011 - 22:43 | 1285800 ebworthen
ebworthen's picture

Yup.

They'll helo over to Pakystan to double-tap OBL but leave the Terrorists on Wall Street and Washington unmolested.

Where is our Military and Judiciary and FBI and Law Enforcement and their oath to defend the Constitution? 

As the Constitution is trampled they are tasked with chasing down religio-fascists in the Middle East.

How convenient.

Tue, 05/17/2011 - 23:33 | 1285954 JW n FL
JW n FL's picture

http://www.zerohedge.com/article/congress-proposes-bill-allow-worldwide-war-including-inside-us

This story with great links that George put together is fantastic! that is where LEO's and all the others who swore to up hold the laws written by the duely elected are..

 

Corporations Own the Lobby!

The Lobby Owns the Government!

Law Enforcement works for the Duly Elected Lobby Whores!

We the People = Screwed!

 

Wed, 05/18/2011 - 12:26 | 1287519 nowhereman
nowhereman's picture

Yes, the powers that be are becoming afraid.  Their media whores are unable to keep the unrest under wraps.  Now they have to aim the "power" of government at the people.  Anyone who criticizes the government is now an "enemy combatent" and our sons and daughters will be used to keep us in our place.

It's all over except for the crying.

Tue, 05/17/2011 - 22:25 | 1285790 ebworthen
ebworthen's picture

It is amazing isn't it?

I bet Hitler would sit back some nights and say to himself:  "Holy shit, they let me get away with that too?  WTF!?!?"

Think of FDR confiscating gold and shutting down the banks.  "Holy Hell, no one assasinated me - all the WWI vets rolled over - wow."

Baaahhhh!!!

Tue, 05/17/2011 - 20:38 | 1285377 Cleanclog
Cleanclog's picture

All this liquidity in system, slogging around, still not multiplying into any meaningful money supply expansion in terms of economic goose.  So . . . if we still must delever the old fashioned contractionary, not inflationary, way then yep, State, Munis, more households and some small businesses must renegotiate debt, go bankrupt, renege on obligations.  More pain ahead. Sorry.

Wed, 05/18/2011 - 05:33 | 1286336 Popo
Popo's picture

Yep.  Poor Ben.   Inflation isn't working the way it's supposed to in his dusty old thesis.    This whole darn globalized economy just lets liquidity run out the door.   The only animal spirits that are getting juiced up on Ben's free-money are the spirits of emerging market economies.

If only there was a way poor Benny could tell the money where to go.   But of course, there isn't.  And the marginal returns on new liquidity are plunging faster than DSK's trousers.   The more Benny prints, the more the rest of the world goes up, and the faster America sinks.

He knows he's fucked.  The panic must be setting in.  He must be telling himself on a daily basis that his thesis will work eventually... just a little more time.

Meanwhile, gleaming Asian cities filled with luxury boutiques, five-star hotels, and world-class hospitals are looking more and more like the "First World", and America looks like the "Third".   Just a little more printing Ben.  Eventually you'll be right.... sure you will.

And hey -- if it turns out you're wrong -- the bankers will still be your friends.  They're the one's invested in EM's anyway.   Heads the bankers win, Tails America loses.

 

 

Wed, 05/18/2011 - 09:03 | 1286601 mayhem_korner
mayhem_korner's picture

Do you really want money velocity to increase and get to $13/gallon?

There's two ways out of this mess - death by hyperinflation or 'cross-the-board default and restructuring.  Here's the thing, the former still gets you to the latter, just increases the size of the stone that must be passed.

We should've taken our lumps in '08 when the problem was 40% smaller.  Strike that, we should have taken our lumps 20 years ago...

Tue, 05/17/2011 - 20:41 | 1285382 lemonobrien
lemonobrien's picture

It'll last a good, long, while... look at japan.

Tue, 05/17/2011 - 20:43 | 1285390 sajeevnara
sajeevnara's picture

armegeddon

Tue, 05/17/2011 - 20:47 | 1285395 Gubbmint Cheese
Gubbmint Cheese's picture

It will only sound good when Jaime Dimon says it...

Tue, 05/17/2011 - 23:37 | 1285960 JW n FL
JW n FL's picture

JP Morgan’s leader “Jamie Dimon” says 100’s Municipalities in U.S. Won’t ‘Make It’ Out of Debt Crisis “Bloomberg” http://bloom.bg/gDo4Wb

Yep.. when he says it.. no one stands up and yells "CUNT!".

Tue, 05/17/2011 - 20:49 | 1285406 AUD
AUD's picture

The sooner we accept them, the sooner we can get state finances back on track, and a real U.S. economic recovery underway.

The sooner you accept them the sooner attention will turn to the biggest deadbeat of all... the sovereign. Inevitable but unacceptable.

 

Tue, 05/17/2011 - 20:50 | 1285409 Re-Discovery
Re-Discovery's picture

The funny thing is "State Services"?  What are they again?  State Highway Patrol . . . OK.  Whatever.  I have a gun and security system, and I like to drive over the speed limit.  They're irrelevant.  Education?  I'll educate my daughter thank you very much.  Transportation?  I'll dodge the potholes.  Fire?  F- you, I have insurance.

I hate every level of government so if the state goes away, I dont care.  I'd much rather the state be the sovereign than the Feds but they lost that battle decades ago.

 

 

 

 

 

 

 

Tue, 05/17/2011 - 20:52 | 1285433 Seymour Butt
Seymour Butt's picture

Why don't you move to Somalia? Don't let the door hit you on the way out.

Tue, 05/17/2011 - 20:55 | 1285447 mynhair
mynhair's picture

Very intelligent response, makes me look like a genius. 

You in Shiela Jackson Leigh's district?

Tue, 05/17/2011 - 21:37 | 1285640 Central Bankster
Central Bankster's picture

I prefer parasites like you, leave instead.

Tue, 05/17/2011 - 21:47 | 1285677 Re-Discovery
Re-Discovery's picture

does somalia have one layer of govt?  And a constitution (yes we still have one.)

Tue, 05/17/2011 - 22:04 | 1285728 BigJim
BigJim's picture

You mean a 'country' that has absolutely no ethnic or cultural reason to be a contiguous state, detroyed by years of colonial meddling and collectivism? What's that got to do with wanting to reduce government? Somalia is the end result of too much government, not too little.

Tue, 05/17/2011 - 22:22 | 1285779 Re-Discovery
Re-Discovery's picture

My point exactly.  Folks think that I advocate nothingness. I am for an government that functions on the consent of the governed.

I advocate the lack of multi-level, state supported 'nothingness' and the promotion of individual, consent-backed SOMETHING.  A future determined by the stakeholders who secure it, NOT the parasites who seek a free ride.

Wed, 05/18/2011 - 12:29 | 1287556 nowhereman
nowhereman's picture

Not too much government, too much IMF.

Tue, 05/17/2011 - 22:49 | 1285861 living on the edge
living on the edge's picture

Seymour=Butt Head

Tue, 05/17/2011 - 20:55 | 1285436 mynhair
mynhair's picture

but...but...who'd register your property liens?

Tue, 05/17/2011 - 20:56 | 1285453 Dejean Splicer
Dejean Splicer's picture

I keep hearing bullshit from the muni-squawkers that they have to raise taxes or 'essential' services would be dropped.

You won't be safe. Mayhem will rule the streets and you will be imprisoned in your own home. 911 will take 90-120 minutes to respond to the most dire calls only.

Fuck you douche nozzles! Raise my taxes and YOU'LL be calling 911!

Tue, 05/17/2011 - 21:18 | 1285544 Re-Discovery
Re-Discovery's picture

I only own an old Shotgun, but I agree.  I see NO benefit to local and state government.  Street cleaning?  Maybe?  Please someone enligten me.

I got junked for something,.  Again, I have no clue what for.  Reduce government, be that the layers or whatever.  I dont care who goes bankrupt.  Tell me what they do and maybe I'll re-consider.

Tue, 05/17/2011 - 21:26 | 1285593 johnnynaps
johnnynaps's picture

Oh, but you see the FBI, CIA, Homeland Security, 535 worthless politicians, and a military that doesn't even reside in this country as being more important than your local services? Just playing devil's advocate!

I feel we need teachers that teach worth-while subjects. Cops that protect and don't bill collect (I like to speed too). Real judges that understand jailing someone carrying a pound of marijuana isn't worth costing the state 500 grand. Shit this country really needs a dictator for the next 5 years, the whole system blows dirty donkey d##k!

Tue, 05/17/2011 - 21:42 | 1285660 Central Bankster
Central Bankster's picture

Who says we want ANY of those things? 

 

I want less local services, I want a smaller military, fewer national politicians, limited federal police, less regulations, a free economy and yes, more liberal drug laws.

 

You aren't playing devils advocate.  You just don't understand that some people who want small government ALSO want more freedom.  Understand?

Tue, 05/17/2011 - 21:51 | 1285691 Re-Discovery
Re-Discovery's picture

My daughter and dog know where the government is in this house.  We have never had a govt employee come over and offer ANYTHING to us.  But we pay anyway.  (I will live with potholes.)

Wed, 05/18/2011 - 07:01 | 1286386 I am a Man I am...
I am a Man I am Forty's picture

building/repair of roads, potholes, road cleaning, should all be paid for by the gas tax at the pump, other than that, I can't think of one single tax that benefits me or that I need or that I have used

Wed, 05/18/2011 - 11:17 | 1287159 baby_BLYTHE
baby_BLYTHE's picture

I'll live (currently do so) with potheads. Agree with everything you wrote.

Tue, 05/17/2011 - 21:53 | 1285692 Dejean Splicer
Dejean Splicer's picture

"I see NO benefit to local and state government."

I agree. The alternative is: if local and state gov disappeared, israel would instruct their sleeper-cell AIPAC to force congress to move in for the kill and we would be living under federal law.

Federal law that was engineered for us by israel. Everyone must be a Patriot.

Tue, 05/17/2011 - 21:32 | 1285608 masterinchancery
masterinchancery's picture

Pretty much on target for most of us; like to know who the weenies are that junked you.

Tue, 05/17/2011 - 20:50 | 1285419 Dejean Splicer
Dejean Splicer's picture

Meredith, you have to admit she has a very strong track record.

Very strong.

Tue, 05/17/2011 - 21:35 | 1285620 francis_sawyer
francis_sawyer's picture

She turned me into a NEWT!

Wed, 05/18/2011 - 00:27 | 1286040 Id fight Gandhi
Id fight Gandhi's picture

Seems to be good sport to rail her from the wall St bankers media.

Her timing may be off, but I do think shell be right

Tue, 05/17/2011 - 20:53 | 1285421 Barleycorn
Barleycorn's picture

I think we all need to calm down and take a lesson from Candide - Everything worked out brilliantly for him and his companions...

Tue, 05/17/2011 - 20:50 | 1285425 mynhair
mynhair's picture

Short CA.  Nuff said.

Tue, 05/17/2011 - 21:45 | 1285662 Central Bankster
Central Bankster's picture

Short California munis into the ground.  Anyone got an ETF?

Tue, 05/17/2011 - 20:52 | 1285435 floydian slip
floydian slip's picture

I heard the talking heads on bloomberg making fun of her this morning.

 

All I have to type is...Karma is a bitch!

 

Tue, 05/17/2011 - 20:54 | 1285437 jm
jm's picture

Translation:  expect a very modest increase in Muni defaults and huge operating budget cuts all over the land.

Revenues are drying up and this will last for years.  BUT with some exceptions, the local muni space has a cashflow problem, not a debt problem.  This means that financing is for capital expenditure and operating expenses and not rolling maturities.

This is a crucial point:  They can forego issuing new debt if needed.  Capital expenditure and operating expenses always get the hammer in this situation, not creditors.

If the world does go to hell in a handbasket, there is better recovery here than anywhere else. 


Tue, 05/17/2011 - 21:34 | 1285619 masterinchancery
masterinchancery's picture

Perhaps in your state things are doable--here in IL, where Barack was once a gofer in the Senate,  we are flat out insolvent on all fronts.

Tue, 05/17/2011 - 21:41 | 1285634 jm
jm's picture

Dup. Using a laptop

Tue, 05/17/2011 - 21:37 | 1285637 jm
jm's picture

I agree with you about Illinois.  California is a pile of trouble too.  But Illinois shows what happen when you HAVE to roll debt... you're effed.  States don't have that problem cut budgets to the bone but leave creditors untouched. 

I could be wrong.  I think country and city munis are where you are really compensated for the risk.

Wed, 05/18/2011 - 07:08 | 1286388 I am a Man I am...
I am a Man I am Forty's picture

you are correct JM, I manage munis, sold all munis in CA, IL, and NJ back at the peak and have been enjoying the return on our munis that were purchased a few years ago in all other states, and they are doing well this year 

Tue, 05/17/2011 - 23:44 | 1285975 topcallingtroll
topcallingtroll's picture

I was so jealous of my doctor friends who set up shop in Illinois.  They were getting 90 bucks for a ten minute medicaid visit, and turning that down because all the other insurance was paying over 100 bucks (specialty care).

In my state medicaid pays 35 bucks if they even pay at all.  About half the time they find an excuse not to pay.

Now I am so glad I didn't plunk down 100,000 to set up a practice in Illinois!  The nice thing about being at the bottom is there is really no place to go but up.  We are doing great here with the dollar devaluation and all.  It helps to be a right to work anti union state with a low wage population.

Tue, 05/17/2011 - 21:50 | 1285679 Central Bankster
Central Bankster's picture

Yah,

Greece just has a cashflow problem.

Lehman, Bear Sterns, Iceland, Zimbabwe, GM.  ITS all just cashflow!  Bailouts and Problem solved! 

Tue, 05/17/2011 - 21:55 | 1285703 jm
jm's picture

No, no, no...

Greece has to roll half of their outstanding issuance in the next three years.  Germans won't put up with that shite over and over.  Greece is going to the graveyard... it is just a matter of how much they can screw out of the rest of the EU and how much voters will put up with.

Most munis won't need a bailout but don't let the facts get in the way when all you have to say is "Zimbabwe".

 

 

Tue, 05/17/2011 - 22:46 | 1285856 Central Bankster
Central Bankster's picture

LOL ok buddy I won't let "facts" get in the way.  Keep buying those US$ denominated debt.  I bet you're getting "compensated" for the risk!

Tue, 05/17/2011 - 21:00 | 1285459 lizzy36
lizzy36's picture

Regrets, regrets.....shoulda, woulda, coulda

Imagine in 2008, if we had written bad debt off, instead of moving it from private balance sheets onto public balance sheets.

Imagine of instead of plugging state balance sheet holes the 1st stimulus has actually been used to help create real jobs through public/private partnerships. Help more people stay in their homes through principle reduction.

Imagine if instead of doing the exact same thing we had done leading up to the crisis, post crisis, we had actually had the courage to try something different.

Shoulda, woulda, coulda..........

Tue, 05/17/2011 - 21:03 | 1285473 mynhair
mynhair's picture

Thanks for the chuckles, Lizzy.

Tue, 05/17/2011 - 21:15 | 1285543 UncleFester
UncleFester's picture

Imagina all the people....living in the...

WhoooHoo

Tue, 05/17/2011 - 21:01 | 1285463 buzzsaw99
buzzsaw99's picture

It doesn't help calpers and calsters that wall street is ripping them off every day.

Tue, 05/17/2011 - 21:03 | 1285484 mynhair
mynhair's picture

Maybe ODammer can be their asset manager in 2013.

Tue, 05/17/2011 - 21:39 | 1285636 Yes_Questions
Yes_Questions's picture

What with all that flooding-earthquake-swine-flu-meteor-impact-fallout-drought-rapture-related-human-detritus to clean up?

Wouldn't have the job, wouldn't have the time anyway.

Boat Drinks.

Wed, 05/18/2011 - 01:03 | 1286095 fxrxexexdxoxmx
fxrxexexdxoxmx's picture

Boat Drinks 

Has been awhile since I heard that. Thanks for the smile.

TTDIDWYAD

 

Wed, 05/18/2011 - 05:23 | 1286333 cossack55
cossack55's picture

You forgot Elenin.

Tue, 05/17/2011 - 21:42 | 1285651 buzzsaw99
buzzsaw99's picture

They'd be money ahead if they put it all in cash and hid it in the mattress. How much money have they lost already? Even now they buy any piece of crap that floats in the moat.

Tue, 05/17/2011 - 21:07 | 1285496 lizzy36
lizzy36's picture

Calpers and Calsters are big players. Wall Street needs them more than they need Wall street. They (calpers and calsters) just don't know that.

Everyone wants to be a player. There is opportunity cost attached to that role.

Tue, 05/17/2011 - 21:14 | 1285510 buzzsaw99
buzzsaw99's picture

the pension fund managers are crooks and the pensioners are too stupid to see it. i watched the calsters guy on bubblevision. he looked just like a goldman sachs scumbag. I could have beat his returns buying nothing but treasuries over the last ten years by a hundred billion I bet. It's maddening watching so much money flushed down the toilet. They are the epitome of "dumb money". Comotose money.

Tue, 05/17/2011 - 20:58 | 1285464 Muir
Muir's picture

...DEFLation....

Tue, 05/17/2011 - 21:01 | 1285478 mynhair
mynhair's picture

No!  No breast reduction for U!

Tue, 05/17/2011 - 21:05 | 1285483 Yes_Questions
Yes_Questions's picture

Please, not on my...watch?

Tue, 05/17/2011 - 20:59 | 1285468 bugs_
bugs_'s picture

thank you Meredith!

Tue, 05/17/2011 - 21:01 | 1285480 Bear
Bear's picture

As Leo said yeaterday: "Keep dancin till the music stops" ... or something like that

Tue, 05/17/2011 - 21:03 | 1285488 mynhair
mynhair's picture

He said:  Buy TSL.

Tue, 05/17/2011 - 21:06 | 1285503 Bear
Bear's picture

With both hands

Tue, 05/17/2011 - 21:08 | 1285511 mynhair
mynhair's picture

until it blows out yer ass....

Tue, 05/17/2011 - 21:05 | 1285481 Cruzan Stomp Revival
Cruzan Stomp Revival's picture

This is how it *should* end in the US: in a deflationary collapse where the unsustainable is at long last unraveled. But I doubt that end game as leech-f*cks, public employees, oldsters who have saved nothing and are utterly dependent upon SS and Medicare, the military complex, etc. can vote themselves money. There is, of course, an unending line of pols at the federal level who will gladly give these highly engaged voters what they want.

The financial elite get their bailouts and tax loopholes which makes the aforementioned small potatoes in comparison.

And because the public debt is denominated in dollars, which the Fed can print at will, the unsustainable can keep going for a while longer, but at the expense of the currency. That's why I'm in the hyper-inflationary camp: there are no adults left and the destruction of the currency is the path of least resistance.

Tue, 05/17/2011 - 21:03 | 1285486 Iriestx
Iriestx's picture

Big up St. Croix Massive!

Tue, 05/17/2011 - 23:26 | 1285938 Cruzan Stomp Revival
Cruzan Stomp Revival's picture

Horry sheet! Another Cruzan. Iriestx, you realize that we have about a 95% chance of knowing each other, right?

It is oh so tempting to guess or at least drop names.

Tue, 05/17/2011 - 23:52 | 1285986 Iriestx
Iriestx's picture

Yeah, there can't be too many Zerohedgers on the rock.

Tue, 05/17/2011 - 21:07 | 1285491 carbonmutant
carbonmutant's picture

"Tax-supported state obligations" will disolve all contracts...

Tue, 05/17/2011 - 21:10 | 1285507 mynhair
mynhair's picture

What is a contract again?  After GM, I got cornfused.

Don't hire dwarfs.  Or elfs.

Poor Timmay.....

Tue, 05/17/2011 - 21:10 | 1285509 zen0
zen0's picture

I have been staring armageddon in the face since the 50's.Ain't happened yet. Never will. Just messiness. Endless, meaningless, messiness.

Tue, 05/17/2011 - 21:13 | 1285524 mynhair
mynhair's picture

Well, someone around as long as me.  It's time.

Tue, 05/17/2011 - 21:20 | 1285550 zen0
zen0's picture

I hope so . the disappointment is debilitating.

Tue, 05/17/2011 - 21:22 | 1285572 Muir
Muir's picture

"I have been staring armageddon in the face since the 50's."

Well yes, but we lucked out a couple of times.

http://en.wikipedia.org/wiki/The_Fog_of_War (movie)

Reviews for the film were very positive. The film received an overall rating of 98% on Rotten Tomatoes

Tue, 05/17/2011 - 21:55 | 1285705 Fiat2Zero
Fiat2Zero's picture

+1 Great flick.

Wed, 05/18/2011 - 11:43 | 1287275 Windemup
Windemup's picture

I be Hypnotised.

Tue, 05/17/2011 - 21:23 | 1285563 Yes_Questions
Yes_Questions's picture

Duck, 

 

and cover...

Tue, 05/17/2011 - 21:10 | 1285520 wpitco
wpitco's picture

Does Obama's stash ever remind you of that kid in the 5th grade who was the first to grow some facial?

Pre-pubescent facial, bitchezzz.

 

Tue, 05/17/2011 - 21:22 | 1285558 Yes_Questions
Yes_Questions's picture

Great haircut reference.

Tue, 05/17/2011 - 21:37 | 1285639 wpitco
wpitco's picture

Haircut? If only we could take it off at the neck.

Tue, 05/17/2011 - 21:16 | 1285531 mynhair
mynhair's picture

Notice to all:

I jumped on TZA today.  Go long.  It's my fate.

Tue, 05/17/2011 - 21:27 | 1285601 Muir
Muir's picture

Hicks: Outstanding. Now all we need is a deck of cards. 

 

____

 

Ferro: Stand by to initiate release sequencer. On my mark. Five. Four.
Hudson: We're on an express elevator to hell; going down!
Ferro: Three. Two. One. Mark. 

Tue, 05/17/2011 - 21:45 | 1285659 Yes_Questions
Yes_Questions's picture

Bankster: Rough air ahead

Municipality: Stand by for some chop

Tue, 05/17/2011 - 21:54 | 1285701 Fiat2Zero
Fiat2Zero's picture

Hudson: Game Over man! Game Over!

Wed, 05/18/2011 - 08:01 | 1286456 Jack Sheet
Jack Sheet's picture

Colonial Marine to Lieutenant: How many missions you been on Gorman?

Gorman: Fourteen..........Simulated.

Tue, 05/17/2011 - 21:16 | 1285534 PulauHantu29
PulauHantu29's picture

So when does GS send in the Troops to silence Whitney?

Tue, 05/17/2011 - 21:16 | 1285545 mynhair
mynhair's picture

All circuits are busy.  Please try again later...

Wed, 05/18/2011 - 08:42 | 1286549 falak pema
falak pema's picture

Meredith looks like she has strong teeth that would bite... a xxxx...not just present her nether side ...

Tue, 05/17/2011 - 21:19 | 1285561 NOTW777
NOTW777's picture

"States employ over 19 million Americans, or 15% of the U.S. work force, and state spending accounts for 12% of U.S. gross domestic product."

disgusting. trim government

Wed, 05/18/2011 - 09:25 | 1286660 Urban Redneck
Urban Redneck's picture

So that would be one fat, lazy, overpaid state employee whose bloated salary and benefits must be covered by seven of his neighbors with productive jobs1 to 7, doesn't even include the federal pork. 

Tue, 05/17/2011 - 21:21 | 1285565 NOTW777
NOTW777's picture

"Next month will also mark the end of the American Recovery and Reinvestment Act's $480 billion in federal stimulus, which has subsidized states through the economic downturn. States have grown more dependent on federal subsidies, relying on them for almost 30% of their budgets."

especially CA and IL

Tue, 05/17/2011 - 22:39 | 1285826 topcallingtroll
topcallingtroll's picture

It's about time they stopped that

Tue, 05/17/2011 - 21:34 | 1285614 Eric L. Prentis
Eric L. Prentis's picture

Meredith rules!

Tue, 05/17/2011 - 21:43 | 1285648 mogul rider
mogul rider's picture

I thought them stealing Granny's Pension cheque yesterday solved all that?

Meredith Please! They're working at it, honestly they are.

Not that having your grandparents move in due to the cheque bouncing is not an inconvenience granted, but hell, we're in this for the gipper, or gupper, sipper or whatver that dick's name was....

oops

Tue, 05/17/2011 - 21:45 | 1285671 QQQBall
QQQBall's picture

Hidden States? Who knew? Like #51 and #52?

Tue, 05/17/2011 - 23:06 | 1285899 topcallingtroll
topcallingtroll's picture

According to Obama there are 57.

Tue, 05/17/2011 - 21:57 | 1285709 Fiat2Zero
Fiat2Zero's picture

Start counting the potholes boyz, they'z gonna all get bigger.

Tue, 05/17/2011 - 22:13 | 1285746 ebworthen
ebworthen's picture

 

There are so many who still believe in the dream.

What full udders for the bankers and elites to milk!

Meredith is right but she is a sun shower, a passing drizzle on the parade of the delusional public toward perdition.

IRA's, 401K's, Savings, Pensions, equity in property...so much milk...

All they need do is make certain that they ape the young, pit them against their own Parents, anyone not "favored", anyone who can be marginalized, look how easy it was for Hitler, for Stalin, for Mao.

So easy, there is an app for that I'm sure...or two...or three...or...

 

Tue, 05/17/2011 - 22:16 | 1285750 bob_dabolina
bob_dabolina's picture

Merideth, 

Show me your books, and I'll show you my cock....which you want.

-Chuck ;)

Tue, 05/17/2011 - 22:44 | 1285850 ebworthen
ebworthen's picture

Careful with posting drunk...

Wed, 05/18/2011 - 04:30 | 1286303 Hephasteus
Hephasteus's picture

That wasn't posting drunk. That's his resume to the IMF.

Tue, 05/17/2011 - 22:37 | 1285820 topcallingtroll
topcallingtroll's picture

This shit is going to get interesting again some day.  I think they can kick this can down the road at least several more years.  Europe looks like they can kick the greece can down the road several more years too.

 

but I think Merideth is ultimately right, and imminently fuckable.

Tue, 05/17/2011 - 22:48 | 1285839 Re-Discovery
Re-Discovery's picture

'Eminently', unless she is spread eagled in front of you (sorry, proper usage is a pet peeve of mine.  Agree with the sense of the statment however.)

Tue, 05/17/2011 - 23:03 | 1285893 topcallingtroll
topcallingtroll's picture

Yeah after I did that I was just too lazy this time to deal with it.

 

It would be imminent if she came within reach of my boner.

Tue, 05/17/2011 - 23:37 | 1285961 Re-Discovery
Re-Discovery's picture

Depending your definitions. 'Within reach' may not rise to the level of fuckable or fucking as someone like . . . say  . . . Bill Clinton may define it.

 

 

Tue, 05/17/2011 - 23:40 | 1285968 topcallingtroll
topcallingtroll's picture

My boner is pretty open minded.  It has rarely turned down anything faintly resembling a female, especially drunk. 

If it is within reach it is imminent.

Tue, 05/17/2011 - 23:42 | 1285974 Re-Discovery
Re-Discovery's picture

As is mine.  I do think imminent would also have to include some aspect of consent on Meredith's part.  Unless you are an accomplished rapist, i.e Clinton o the IMF guy.  Meredith is a big chick so, at least in her case, she would need to be 'within reach' as well as willing to oblige.

Wed, 05/18/2011 - 08:51 | 1286564 falak pema
falak pema's picture

Are you guys thinking of launching a "yes we can!" boner club? You know, what happened to the last guy who joined that club; he ended up in ...well maybe you could play poker with him once there...5 card stud...and the last one to lose it wins jack pot to pay the jail keeper for a hooker. 

Tue, 05/17/2011 - 22:42 | 1285842 Sutton
Sutton's picture

Harvard Ave. in Rockville centre NY is a disgrace.  Ridiculous potholes for 15-25k property taxes.

Nice job Skelos

Tue, 05/17/2011 - 22:48 | 1285853 ebworthen
ebworthen's picture

 

Tyler, oh lordy Tyler, please, not the commercials with audio, anything but commercials with audio...

 

Wed, 05/18/2011 - 01:07 | 1286097 A_MacLaren
A_MacLaren's picture

Four words:

Firefox with Adblock Plus.

Wed, 05/18/2011 - 09:37 | 1286684 VisualCSharp
VisualCSharp's picture

Chrome works just as well.

Tue, 05/17/2011 - 23:02 | 1285895 PulauHantu29
PulauHantu29's picture

"I'll gladly pay you Thursday for a hamburger today."

Meredith Rocks!

Tue, 05/17/2011 - 23:36 | 1285958 Kevin... Who su...
Kevin... Who suffers from Cassandras curse's picture

I believe it's "tuesday"

Tue, 05/17/2011 - 23:08 | 1285898 monopoly
monopoly's picture

Meridith does a really good job with facts. There are a few out there that will tell the truth. But it is going to take time for it all to come together. It will, but do not know when. This volatility is really gettng annoying. Went to cash this week. But still have all my physical.

Tue, 05/17/2011 - 23:13 | 1285906 topcallingtroll
topcallingtroll's picture

It's going to take longer than we want.  I suspect this Greek thing and muni thing will be playing out for years.

 

I am troubled by the lack of junks on my topcalls.  This means I am probably wrong because there are too many of you going to cash.

I never see a kind word about gold and silver anymore.   What's with all this pessimism about gold and silver?  You guys getting pessimistic about the pessimistic scenario or something?

Tue, 05/17/2011 - 23:24 | 1285941 Seasmoke
Seasmoke's picture

dont fight the Fed, but you sure as hell can fight the states.....they will be the first for who the end of the road will come up for the rusty can.....still not sure who will be first.....illinois, NJ or cali ???

Wed, 05/18/2011 - 01:37 | 1286144 Uncle Keith
Uncle Keith's picture

Never, never a mention of raising taxes on the Overly, Obsenely Wealthy. 

 

At what point does Everyone Sing in Unison: "Too Few Ended Up With Too Much"?

 

The refrain? "It Was Never A Sustainable Idea".

 

I expect to see this analysis incorporated into any all future commentaries. Henceforth, it will be mentioned whenever there is a talk of "Solution". 

Wed, 05/18/2011 - 01:35 | 1286146 Coldfire
Coldfire's picture

What are they waiting for? Jump, fuckers!

Wed, 05/18/2011 - 01:43 | 1286154 AldoHux_IV
AldoHux_IV's picture

The real issue here is the enormous over-leveraging of taxpayer-supported obligations at a time when taxpayers are already paying more and receiving less. In the states most affected by skyrocketing debt and fiscal imbalances, social services continue to be cut the most. Taxpayers have the ultimate voting right—with their feet. Corporations are relocating, or at a minimum moving large portions of their businesses to more tax-friendly states.

\It aint just the states, and it points to the problem-- corporations getting away with too much.

Wed, 05/18/2011 - 07:53 | 1286440 uniman
uniman's picture

When and if the US Federal finances finally overtly go up in smoke, that will be the great opportunity for We the People to rush the prison gates.  If their system of money disintegrates, so goes their systems of control.  That will be the perfect time for the people and the States to reconsider the meaning of the 10th Amendment and to regain control.

Although I'm sympathetic to the anarcho tendencies that many have, I think those are ideals that civilization can aspire to and careful develop, but not something that's likely to easily emerge after the Fall . I think it's much more likely that a reasonably free and prosperous system could emerge if the people, the States, and the 10th amendmernt were back in control.  This is a scenario that's close enough to today's warm and fuzzy known-reality to be accepted by large numbers of people, even if in a fait-accompli fashion.

Unfortunately, in today's Planet of the Ape's world, too many people _really believe_ statism is just and effective (or at least extremely lucrative.)  Just as they resort to such desperate measures now to preserve their system, the Crash will spawn a plague of those people who will fight hard to regain control.

But it is fun to imagine watching the former Feds and Banksters revert back to their feral ways.  They could launch their own insurrection, build IEDs, and generally throw sand in the works.  They'd have to hide from their own drones and perhaps civilization could muster some bounty hunters to dig them out of their spider holes.  Maybe they could take over Cuba and hatch plots to retake the mainland.  Whatever they do, it will be time to spank those monkeys, choke the monster, and whack it back to size!

Enjoy the ride

Wed, 05/18/2011 - 09:34 | 1286683 SilverFiend
SilverFiend's picture

Does this mean that it will no longer take 7 guys to mow the shoulder of the road in my state?  One guy mowing,  two guys holding the stop signs to take it down to one lane.  One guy to drive a state vehicle to lead the motorists 100 yards through the work zone.  And two guys standing around talking.

Wed, 05/18/2011 - 14:43 | 1288247 huckman
huckman's picture

Any surprize that the number one actuary collage in the nation University of Wisconson,

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