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We mean, if you simply had to pick....
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is there a door #3 ?
Either choice gets it up door #3 and ends up Greek. OUCH!!!!!
Onehunglow - a German with a glowing personality?
German no. Irish American but glowing personality yes.
I pick the one we can fix with accounting gimmicks.
Now imagine if California was selling protection on Greece
CalPERS probably already does...
No.... you are thinking of Athens, GEORGIA !!
Greefornia!
Extremely well said Marla.
One must keep one's eye on all the balls, not the ones that the MSM chooses everyday.
Both are in earthquake risk areas, and so is Japan. Correlation?
I say Greece carries, potentially, a much larger unknown risk. The € is the other reverse fiat currency: if it is gone there's the $ and nothing else, as £ and ¥ aren't safe. Nobody takes the various commie moneys seriously.
Greece will be rescued and put under some EU protectorate program. The IMF will be kept out of EC matters.
What unknown risk? Just compare the GDPs, for Pete's (Papandreou) sake!
Even if there are skeletons in the closet, Greece's closet is going to be much, much smaller than California's.
What "EU protectorate program"? The EU is not in the business of running entire countries. Most European commissioners, not to mention the head of the ECB would not be able to find their asses with two hands, a map and a torch, and you want these bozos to run Greece? Yeah, right. Don't make me laugh.
What may well happen is that the big players of the Eurozone, France and Germany (=ECB), will impose drastic cost-cutting measures and demand results. But that's more or less what the Greek Government had in mind anyway. No, the Greeks are not going to like it, but it is highly possible their economy will rebound very strongly after that.
Since the IMF has already invested quite a lot of money into Eastern European countries, I think they are already "in" the EC, so to speak, thank you very much.
California is a rather isolated incident, the US has had cities essentially fail before (NY during the Ford Administration comes to mind). If Greece goes then Italy, Portugal and Spain all go too. What are the consequences on the UK especially and even Japan? We simply don't have a precedent for a Greek economic collapse. The devil you know is always less dangerous than the devil you don't.
California is a rather isolated incident
Huh?
oh hell no. pervasive, not isolated
illinois and new york right on their heels...many more right behind them.
and how about every municiplaity that thought they could paygo their OPEB forever...
Absolutely Hell F*&@#$g No!
http://globaleconomicanalysis.blogspot.com/2009/01/44-states-face-huge-b...
Great Article from Mish on State Budget Deficits.
"oh hell no. pervasive, not isolated"
Yeah Baby Anony! California!
We are the biggest and ugliest (deficit) just like our Gov'nah Broke Ass Arnold. We are always the trend setter. We are first again!
If Cali goes bankrupt it should be a spectacular flame out!
California = TBTF = The Citibank of States
Break it up. North Cali and Southern Cali. Fire the management. Wipe out the share holders. Form a new state bank like North Dakota.
Nah, we need 4-8 states so that we get enough Senators.
California and Greece are object lessons in why have a unified currency is a bad idea. If we had the Califi and Greece was still on the Drachma, bond vigilantes would have kicked our assets a long time ago and kept us on the straight & narrow. No borrow-and-spend Republicans like Arnie.
Yep, 20+ right behind them, but...............Kali is has been bankrupt for years.Pension funds, and tax revenues are a disaster in these other states.
Greece is a smaller issue, now if Spain goes down, that's a disaster, then comes Portugal,etc.......and bye bye EURO.
Mr Anton,
I refer to the known unknowns, and not the unknown ones.
What is the point of the EU Constitution if not to run entire countries. The basis for intervention will be added after Greece, if it is not there yet.
I meant the Euro currency zone and I'm sure you understand that. My bad I didn't make it clear. Can you imagine the IMF interfering in/overriding the ECB directives? That won't happen while Greece keeps the Euro currency.
Not to count that Mr. Terminator could threaten (as it has already done in the past) the US Governement at a whole if he doesn't obtain what he wants.
Latest dollar rally is likely to end soon (100% of it was speculative as the swap programs between the FED and other central banks was shut-down meaning that there is no shortage of dollars around) and a test of new lows into the DXY Index is likely to occour in the month of February if the California issue gets hot...which eventually will
good catch on the swap lines but you have the logic / practical application of inverted.
to rummy ya: 'you started with an illogical premise and logically followed it to an illogical conclusion.'
the DX / $USD has bottomed. period.
run my mouth often but rarely stick my neck out technically ~ uncle buck be headed higher; much, much higher.
back at the end of 2008 dollar went up as there was a shortage of dollars into the market and this is why they set-up swap programs.
Many in the Street think we are in the same configuaration as in late 2008 and thus bought dollars.. but they will eventually have to sell them as the move is backed by thin air...
Unless we see the kind of inflation we see in India or China I would then agree
Why would high inflation help the dollar to move higher? That doesn't make sense.
The dollar is in a certifiable uptrend right now against other currencies because it is the least bad one of the euro, yen, and dollar. It has nothing to do with dollars, per se, just how bad the euro and yen are.
because of higher interest rates...
Isn't that terrific, your number ONE, because all the others are shite.
5.7% growth 3rd Quarter,what a joke...............lies, liars, and damn liars.
Smoke & Mirrors...............
california is just the first. there are 44 states on respirators right behind it.....
44 little greeces.......gonna be grease spots by fall.
Marla, don't forget that California pays more federal tax than it receives federal expenditures. As of 2006 (see http://www.census.gov/prod/2008pubs/cffr-06.pdf ), 254 billion were expensed and 325 billion were paid (a 0.78) ratio. The difference is around 70 billion, around 7% of its GDP, compared to a projected deficit of 25/30 billion dollar, between 1 and 1.5% of its GDP.
Greece is in a reverse in that position, it has a government deficit of 13% of its GDP AND it is a net recipient of EU transfers (around 4% of its GDP).
I am definitely more worried by Greece.
Especially with the advantages California has over Greece with respect to entrupernial capacity, economic diversification and more constrained intrenched mega corruption.
California + Illinois + N.Y.
Do I win something?
Why would you leave NJ out?
California + NY + Illinois?
-or-
Portugal + Iceland + Ireland + Greece + Spain?
Anton-- you win absolutely NOTHING. We don't have the capital to handle prize giveaways.
I'll go clearly for those stupid greeks!
We've got the Terminator right? I heard he was on the phone with the Incredibles and Batman to fix it all!
I'd take Bruce Wayne as chairman of the Fed before I took Bernanke. I bet Wayne could actually do something right, being CEO of Wayne enterprises and all...
Possible implosions in Greece and California (not to mention the other PIIGS), to be sure. I'm on the lookout for an explosion in China.
The need to maintain full employment is resulting in continuing illogical investments in overbuilt industries. With much of this growth funded by the government-owned banks, the ticking bomb is the country's non-performing loans.
Who's on first?
I don't think it's meaningful to compare GDPs. Better to compare total debt numbers to assess market impact, or budget numbers to asses impact on its economy. The California state government only has a small claim on its people's output---the much bigger share goes to the Federal government. And so any default by California would probably have a less pernicious effect on its people than a default by Greece. Not to say it won't be a major problem. From a market impact, Greece's €280bn of traded bonds looks a lot bigger than California's $50bn of general obligations (I may be wrong on the California number, can't find good data, am happy to be corrected)
Answer - I pick Iceland to get the ball rolling.
It is really a test on how good we are at fixing elections around the world or the ability to subvert the will of the people with some good old fashion back room politics.
To the Vikings of Iceland- Remember, it is better to die in battle and go to Valhalla!
Exactly Marla. Even Illinois, the next to fall after Califormia, is bigger than Greece
Banner ran across the screen last night, Illinois, and a couple more, are going to get help, bail out's.
Now you know we can't have Illinois going down!.Home of Capone...........
Derivitives, all $1+ trillion of them. No one mentions them anymore. They will have their 15 minutes of fame someday.
Let's see ... should I be be more worried about a state led by an Austrian muscleman (they invented some form of economics?) or Greeks (who may be bearing gifts)?
slaughter the PIIG! seriously
If California is America's Greece (albeit much bigger) where is America's Germany (i.e. someone with the fiscal rectitude and exporting power to actually undertake a rescue)?
Rhetorical question ...
Oh for a clean default...Defaults are cleansing. The harmed party in a default is not the debtor but the creditor. After a relatively short uprising (or revolution), GDP will resume.
Unfortunately, rather than a clean default, we will be witness to years and years of preferred party bailouts while screwing those not politically connected.
The good news: either way wine will flow.
While I agree that CA is a fiscal nightmare, people forget that the taxman here (I'm in CA) hasn't really yielded his big stick. Yeah, we got stuck with a .25% increase in rates and like percentages (or higher) in sales taxes, but in the case of a potential default, the numbskulls in Sacramento will surely wiggle or shove additional taxes on us. Also, local municipalities are conning residents into passing special "Parcel Taxes" for "schools". The nitwits in my area voted 3:1 for a special parcel tax, of which less than six months after passage they've blown through the entire years allotment. Meanwhile, any discussion of pension reform for the Teachers union was strictly off limits, nor any 100 common-sense budgetary proposals and cutbacks people such as myself proposed.
The long and short: CA is a disaster, but we're a long way, and lots of higher taxes away from a bond default/bankruptcy.
CA state lawmakers are taking aim at free parking now. Where we work, where we buy groceries, etc. Quotes from Lowenthal (D-Long Beach):
"Free parking has significant social, economic, and environmental costs."
"It's nice that we've been treated to this luxury."
"The problem with free parking is it's not free."
http://www.latimes.com/news/local/la-me-free-parking29-2010jan29,0,21162...
This state is shit...
ive been advoacting that we sue ourselves lately. california, that is. the state should sue the residents and the residents should sue the state. our system is so inept its sad. the people that want to fix it are laughed out of the room. if i could land a goddamned job in manhattan id be out of here.
oh, and if there is one thing we CAN do, its vote to spend more money. cause no one ever thinks theyll have to pay their portion. more schools? thats a great idea! pass a tax. this or that for a few billion? itll only cost us each $45? im in! except no one wants to pony up the dough. wait, you mean when i vote for the state to spend billions IIIII have to give the state that oney to spend??? no fucking way. not cool dude. i fucking hate the idiots here. but we have the best weather! i actually love living in so cal. bu really, i cant stand how fucked we are. cause it makes zero sense how t could get this bad.
If the banking system is able to drain billions from the US and buy Dictators shiney new tanks and swimming pools and tennis courts in germany during the 30's while american's starve. I don't think it very much matters which one defaults. Whoever CAN pay is GONNA PAY.
Nice post to put the "Greece problem" in perspective.
And like California, there are a few more in the States.