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Oh Yeah, BABs...
Remember BABs - the state stimulus that shockingly refuses to be included in the latest example of infinite government largesse? Just in case you have forgotten the program that could soon expose a gaping quater trillion funding hole in state budgets oddly enough refuses to go away. Judging by the chart below, someone is paying attention. But who cares: the full impact of the BABs subsidy will not be felt for at least another 18 days so why worry: it's not like the market even pretends to discount anything anymore.
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The market "Santa" is dumping pretty presents with bows on top...and they're all ticking.
Am convinced BABS & state budget losses will be the epicenter of the next "crisis".
No one is talking about the FOMC meeting this week because there are no expectations.
Bernanke could easily drop the muni and MBS future buying rumor at this meeting in order to supercharge those markets. I don't expect it, but you have to be aware of the possibility given their track record.
The only question I have is when Ben plans to start making my car payments.
Santa is taking a dump alright. Right down my chimney.
who cares...the shadow banking liabilities have stopped contracting...it's up, up and away for everything...buy it all!
babs was alright. parents phoned the cops every time i honked the horn. i finally got wise and found goldie.
The Teleprompter will be "toast" for 2012 if CA, NY and Il are bailed out. The sheeple are getting restless. Even the MSM can't ignore this one.
Complete collapse of CA NY and IL are already priced into the market -- Buy, buy, buy....Just ask Leo
Lol. Who's gonna bail them out?
Oh right, the us taxpayer
LULU has not been a lemon.
I think the plan is for the Fed to bail out munis so states lose all semblance of territorial and legislative sovereignty to the Wall Street/Washington kleptocracy
same wavelength
Bingo. Been harping on it for months. Everyone expects states to come up with their own solutions to reckless federal spending... however, state issued currency, state banks, et al, all presuppose that states have the power to make these decisions. Like our regulators, and federal government, our states will promptly turn over their sovereignty.
In the end, its about simple repudiation as they will just keep adding to the debt, with or without our consent.
Hit me BAB's one more time..
Looks like TLT might have bottomed.
I'm watching it closely.
You do that. I'll be rolling some American Silver Eagles so keep the noise down.
Can someone who can reach Sarah Palin do me a favor?
Ihave an excellent idea for the government, which she may use as part of her election campaign too. I suggest that government hires unemployed people for stuffing quotes instead of HFT machines. This serves both the purpose government which government wishes to. The salary of these people can be charged from middle calss by adding a charity tax.
If she likes the idea, please ask her to refund the money I lost by going short in the markets (thinking its a technical call) again and again at each juncture for last 6 months. I know going against ben is a serious crime but now that I am helping them, they should treat me as a accomplice.
Ignorant Question: With the yields at 6.37%, couldn't the municipalities still hit the market, just at a higher rate? And also, most of those bonds that were sold were intermediate duration. So in other words, this is a ticking timebomb, but we still have another 10-20yrs before it goes off?
The yield you see is based on price in secondary markets, what the bond issuer pays is fixed. Even though bonds in question aren't due for a few years they roll them over on a continuous basis, so they will have to pay higher yields for 10-20 years from here forward.
It's not the already issued BABs that are the problem for the states, it is all the new paper they need to issue to roll maturing debt and cover operating expenses. As we saw with Greece and Ireland, when investors lose confidence interest rates spike and lock issuers out of the market. California is a good example. They will need to issue tens of billions in debt to cover cash flow requirements next spring. If they can't sell the bonds, they will be forced to get a bail out or implement truly massive spending cuts.
Cash from the stimulus bill have run out for the states, so their funding shortfall should come into stark view in 2011. Many local governments are looking at cutting 10 - 25% of their work force.
"...this is a ticking timebomb..."
"Actually throwers don't worry about ticking 'cause modern bombs don't tick. ..."
good idea, but you are too late already.
She's already outsourced it to China ....
OK, So I have another one.
Ask her to put another clause in the tax cut deal (Obama would bow down anyways) that the tax benefit middle class gets, they will need to buy stocks with that money for (banker's) nation's growth.
See, I need my lost money badly. I read Nic's articles with great interest thinking he is really good. He is but with "fair" markets, and I underestimated the fair part grossly.
Please pass on this idea to her. we can share the reward.
Success is not greedy, as people think, but insignificant. That's why it satisfies nobody.
-Seneca
"and as for success, it shouldn't happen to a dog.." Nabikov??
Let's call a spade a spade --
These are Gut and Destroy America Bonds, and have absolutely zero to do with America other than banker bonuses and letting the defrauding of the future continue in perpetuity with intent to divide a nation now.
Dividing fraud and stealing up into pieces is still fraud and stealing.
There you go. The states must be broken anyway before they will accept a world currency, whatever that may be.
History suggests that taxation without representation ends bloody.
Europe set up nice and broke for 1 world govt/currency, only thing holding them back now is pesky US states, but they can be bankrupted overnite whenever the plan is set for.
that's where you're wrong, they do promote economic growth (distortion) my city is shutting off street lights, ambulance service, closing school, and buying property, building a new city halls, and creating redevelopment zones (corporate welfare) which are subsidies. The economic distortions are laughable, but the money (redevelopment) is firewalled off from operating cash. So the city of San Diego has fewer fire and police, but they will probably build a new stadium for their professional football team. but we live in age minus any vision. Obama is the poster boy, short term solutions at the expense of long term solutions.
short term band aids, at the expense of long term solutions
there, fixed it for you, from what I see, their short term projects aren't actually fixing anything, even temporarily
Do people in your town forget how to drive when the lights are off?
Do people forget how to get themselves to the hospital when ambulance services stop?
Do people forget how to protect themselves when cop-unions aren't bought off?
Quit making others pay for your city's helplessness, but thank you for illustrating my point which is BAB's gut one state to pay for yours - divide and conquer.
"did you ever know that you're my hero..."
I am sure that Uncle Ben will do what is best for the states and the American taxpayer. He seems like a really nice guy!
How do I rename my avatar?
You don't, but you can change the image.
Fed wants inflation and dollar devaluation. The more shitty bonds they can buy the better for achieving those goals
yeah this may be a more efficient way for the Fed to further distort the economy, let Babs expire, and then buy Muni's. They could have worked around UI that way, but chose not too, do we need UI with SNAP and section 8? If Fed is buying Muni's, and to that I would say, you betcha, you want get you some.
you can get rid of SNAP and UI by just dropping food in 'nutrition zones'
add some more sec8 housing or tents in those areas...
One of the biggest farces is the political class sighting BABs as a "success" in stabilizing the muni market. Yes, they kept in on life support, but it would die again as soon as the plug was pulled. They were sold as "no cost" to the Treasury since in theory the interest subsidy from the federal government would be offset by investors paying taxes on the income from the bonds. Didn't turn out that way. BABs were mostly bought by pension funds and the like that don't pay taxes, thus the cost of the BABs over their life is MUCH, MUCH higher than advertised. If only the Federal government were forced to use GAAP accounting.