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Texas To Rely On Bond Sales To Replenish Empty Unemployment Trust Fund
Broke US states are probing new lows with each passing day, as money continues to stubbornly refuse to grow on trees (unless you have discount window access of course). The latest funding fiasco comes from Texas, which Reuters reports is planning on selling $2 billion in debt just to refill its empty unemployment trust fund. We are confident that bondholders will be ecstatic to put their money into a extremely rapidly amortizing "asset" that will begin depleting from day one and will likely have no collateral recourse in under a year. But after all, it is other people's money, so we are confident this particular Citi/BofA led bond offering will close and price and sub Treasury rates.
More from Reuters:
Texas, like many states around the nation, has seen the recession drain its unemployment insurance fund, which pays benefits to jobless workers.
Last year, Texas paid out $4 billion in jobless benefits, up from $1 billion in 2008, said Ann Hatchitt, a spokeswoman for the Texas Workforce Commission.
Along with at least 33 other states, Texas has also borrowed from the federal government, which will start charging interest at the end of this year.
By early May, U.S. states had borrowed a total of $38.9 billion from the federal government to pay unemployment benefits, according to a Government Accountability Office report.
"We don't know yet if the bonds will be tax-exempt," Hatchitt said.
The co-senior managers of the new debt, if it is approved, are Citigroup, which is working with BofA Merrill Lynch , Loop Capital Markets, and Estrada Hinojosa, she said.
Ironically, the underwriters will likely end up holding a big chunk of the offering on their own books, demonstrating just how efficient of a financial system ponzies are: bankrupt entities using issued debt to buy the debt of another bankrupt entity, so it can give its unemployed llittle green pieces of paper, and prevent an uprising.
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If I buy these bonds and Texas defaults do I own the unemployed peoples?
You might end up owning Texas, either as that or part of the Baja Oklahoma Federation described on another thread. You ready for that?
I thought about taking out my life savings and buying those bonds. On second thought, I will just set my money on fire in the back yard instead.
Make sure you cook some hotdogs on that fire. I'd hate for all of that good fuel to go to waste.
I'd rather buy a Greek island.
Mexico will own Texas.
It's already been sold.
Yes, but only the white unemployed people, Juicy. Otherwise, it'd be racist.
No. But maybe you will get to own some of the iPads, LCD TV's, Whiskey and smokes that will quickly be purchased with your money.
It's Texas, so guns, ammo, whiskey, and smokes to be accurate.
We are sorry to inform you that all human cattle has already been branded. The dangerous days when an adventuresome entrepreneur could go into some country and claim his own herd simply through the cunning use of flags and paper are gone. If you don't chew your daily dose of greenbacks too noisily, though, we might give you supervision of your group two days per month. Thank you for your inquiry.
genuine laughter over here!
Yes, I am proud to be a Texan (not native). Everyone here is absolutely convinced the depression has missed us. Until now, there is a partial truth to that statement. What is really sad, our "low" state unemployment rate of 8 % would have presidents voted out of office in a heartbeat. I guess the average folk don't matter anymore. It looks like we can play the same ridiculous games as rest of the country.
And why not? It's fun!
It's fun until it's not fun.
Go visit the other states and you will know all is well here in Texas. We are not the same as the NE or WestCoast, we kick the people off unemployment much faster here. The fund will be replinished as we go forth hopefully without the entitlement states.
By the way, this fund is usually paid for by taxes to private businesses. By not accepting federal funds, we do not need to continue the fed unemployment BS. Only because the oilfield was cruising with $150/bbl did we see such a contraction in employment when oil fell so rapidly.
Man we screwed up when we joined the USA, but ya'll weren't Socialists back then.
Ah, the old "Texas is better" attitude. You guys do seem to be a bit boastful over there, don't you? Well, all might be well there, but you can thank the Federal Reserve's reflation and devaluation campaign for that. Was all well when oil sank to $40/bbl? I doubt the 30 some odd salaried professionals in our Houston office who got laid off when energy companies suddenly found themselves unable to spend as much money as they were used to thought all was well.
Deleted, wrong comment.
Texas derives only a fraction of what it did at its peak from oil--I believe something like 1/3 of the money/jobs vs. the 80s.
Believe it or not, through the dot com bust and the last recession it was still chugging along creating jobs, and from the last recovery until this latest recession was responsible for the vast majority of the country's job growth.
Funny how staying the hell out of the way of the productive instead of crippling them with thugs tactics leads to the opposite results we see in Detroit, Chicago, and Newark.
In Houston you don't really see the unemployment/unemployed that much, but what you do see everywhere, and I mean everywhere is empty for lease CRE of all different kinds (Strip-malls, office buildings, etc.).
Same goes for Austin. Empty strip malls and and (high price) office buildings abound.
IYR up today!
Austin is similar except for the homeless. There are homeless on every street corner. Our local city gov't loves endless handouts as rest of the citizens are harassed. I guess it is just a preview of what is coming to your town/city/district ......... except all the citizens will be the homeless.
nah. Austin has always been like this.
Stop feeding the animals and they will leave. Austin always has been a haven for hippies and now "unemployeed musicians". Really, don't give them a dime, a family member may need that dime.
It's hard to see the legion of unemployed engineers and other high dollar earners that are now living off of their nesteggs. My father applied for an opening at an engineering firm. They had ten openings and something like one thousand applicants.
He's been out of work for more than a year now, and as such is now looking outside of Houston for work. If he fails to find it within a few months, he will start looking at other states. Failing that, at the two year mark, he will go overseas.
I have a feeling he's not going to find employment until the two year mark.
It's hard to see the legion of unemployed engineers and other high dollar earners that are now living off of their nesteggs
Agreed. I think when we start seeing massive residential RE forclosures in Houston we'll know that the savings have dried up and the shit is really hitting the fan. By that time though, there will probably be riots in L.A. and Detroit.
tmosley, I feel for your dad. Even as an engineer, I am stuck as a temp worker at a slowly dying company that once was proud. Obama can save those Wall Street d-bags jobs whose do nothing by steal from the masses. F*ck those engineers who built our society. I guess it is easier to hire slave labor through the H1-B visa program and ship them home when we are through with them. Expect to see a lot more BP messes in the future.
The MSM is completely clueless of the damage the Offshore Drilling Moratorium will cause, they only quote the jobs lost in the exploration and production. If you include all the seismic, upstream, oil servicing, pipeline etc. etc. plus all the consumer jobs who depend on those jobs the amount wealth lost by the Gulf Coast economies will be staggering. All caused DILIBERATELY by some man-child in chief.
My company has to bid lower now for contracts because another company that did offshore work is now moving into our sector out of necessity. Fuck you Hope and Change!
EXACTLY++++
But, I do laugh my ass off that GE now owns Hydril- kinda backfired on Immelt.
Enjoy all that offshore work Hydril.
Didn't Gov. Perry turn down a bunch of Federal UE money so as to avoid the strings attached? The thinking went that when the economy improved, TX would have the lowest UE premiums. Unfortunately, the economy isn't going to improve.
Yes, I fear that with the lower energy prices and drilling moratorium, a chunk of the Texas economy is about to get seriously side-swiped. However, saw data that showed the % of each state's GDP that was attributable to federal, state and local gov't spending. Texas was lowest in the union at just under 16%. Times will get rougher here, but I think that Texas is in a position to weather the storm much better (better being relative of course) than many other states.
Rick Perry, the governor of Texas, is a Bilderberger.
http://en.wikipedia.org/wiki/Rick_Perry
Dude if the "Bliderbergers" associate with Rick Perry we got NOTHIN to worry about. That guy is the biggest empty suit moron in politics today. Yes even more than the Obamatron.
Gee, and I thought the reason he was looking so presidential to me was because he had no fear of throwing the swith on cons. Now I know it was just the suit.
You can't be elected dog catcher in Texas if you have any problem throwin the switch........
@ gasmiinder
all the bilderberg politicians are empty suits. they are just puppets for the elite. leadership skills not required, just stage presence.
All the world's a stage.
You my friend are correct. Perry is no man, he has a big vagina and sells it cheaply.
A moron, perhaps, but he obeys NWO orders and that's why he is dangerous.
911 was an inside job.
Damn! And I thought financing their own unemployment rolls would lead Texas on the line to sucede from the Union.
Oh well... perhaps they can tax the heck out of the NG/shale operators to make up for some of the deficit.
Perry was an Aggie and even worst in the Corp. If that is the best Bilderbergers can do the world has nothing to worry about. Big hair is the only thing filling his big hat.
Perry took on the role of being the highest volume executioner, after being handed the baton from the Decider Shrub, that's no mean feat. Not many humans can do that job as well as the Chinese fascists.
The debt's our plight...So far and wide
CLAP CLAP CLAP CLAP
Right through the Heart of Texas!
(I'm a native Texan, so it hurts a little more)
Kind of lends a new meaning to Revenue Anticipation Notes (RANs), as in "My money done up and ran away from me with the bums down the street."
Dear Federal Government of the great United States of America,
I warn you that if you don't bring that helicopter down here we will suduce your fans by saying that we will pay higher interest rates than you offer. (We don't intend to ever pay up either but who cares about that.)
Truly yours,
Texas
If Bill Clinton were still in the White House, I would warn you to watch out for the Black Helicopters, but doing so now might be deemed racist, so you'll have to warn yourself.
You seem to forget that Billy was declared America's first black president....Racist!
;)
They are not black helicopters, they are Radio-Opaque helicopters.
The signs of stress get bigger and bigger. Guaranteed, every bankrupt state tries to do the same thing. California did it, and that money is already gone the day they sold the bonds. When the unemployed take thier checks and put gas in the car, or hop a train/bus ride to D.C. and start tearing up the streets in protest, then you will get something out of it. Otherwise, sit back and get what you get. Until the people of this country, instead of talking big, start acting big, and it doesn't have to be necessarily violence, unless they push you into that boat, stand up and start hitting the streets in protest by the millions. Everyone who is unemployed/underemployed should be in D.C. right now. Nothing is going to change otherwise.
It might be more helpful and healing if the unemployed got off their 99-week-vacation butts and knocked on a few doors to do garden work for cash at rates competitive with that charged by the illegals you keep importing to do the work that "self-respecting" (HA HA) Americans won't do.
There is less a shortage of work in the US as there is simply a lack of willingness to actually work. Everyone wants to be a director, and no one wants to be a stage hand.
They'd rather be at Starbucks sipping that $5 Whatever Venti, tapping on the IPad and yakking on the blue-tooth headset to the IPhone, both of which were bought on someone else's money.
As the Right Reverend Wright, former pastor to the Obamanator himself, once said, "America's Chickens are Coming Home to Roost!"
In 2006, I spent a year in Japan accompanying my husband, who was on sabbatical at Keio University. After the initial period of getting used to being a gaijin, I decided that staying at "home" in a 600sq. ft. apt. (in the trendiest neighborhood in Tokyo, I will admit), was not ideal. (I will also admit that I had prepared for this months ahead of time, and had researched many companies that might hire me, as well as working on my own.) Although I did take a course in Japanese prior to leaving, it did very little for me, even though I am very good at European languages, and worked in Europe for years.
What I found was this: It was easy for me to get hired at the premiere language company in Japan. After this, and concurrently, it was easy to accumulate a host of female students I taught privately. I was in great demand. It was one of the best times of my life. I learned a great deal from my students. I was not entirely focused on money, and that was a great liberation.
What I am attempting to say here is that work can be satisfying at the highest levels, even if not highly remunerative. I had enjoyed this previously in France, under similar conditions. People need to rethink their priorities. I view what I came home to--a large suburban property--as more of a burden than a benefit, and it's entirely paid for (by me). I am still working, but with fewer emotional benefits, even if my compensation is far greater.
The first to feel the heat, and are completely documented, are the soon and recently retired, after stuffing gobs of overtime stolen from the 20-year olds, into major exit packages so they make more by not working and collecting Social Security INSURANCE. Our children will be paying for them to live in fat city while student debt slaves watch from the buses they can afford to ride...or until the damn breaks and the realization that the promises were extracted by paid and setup strawmen, and not representatives of the people.
Not to worry, my friend. That little problem will be solved by the Death Panels. The rest will be marched to the countryside to grow the food that will be increasingly scarce. Pol Pot with a Happy Face ... Be careful about the Change you are Hoping for.
These are not the Change you are Hoping for?
(Hm, or chains...)
Well, at least they aren't issuing bonds to make interest payments on previously sold bonds. That would be really pushing it.
Perhaps they could pay the unemployed IOU's, much like California did lst year. Except I prefer they use payroll budget of the state employees to pay the unemployed real $$ and save the IOU's to pay the elected officials.
I thought that's what we were doing...?!? A note is a debt.
But the FR notes are accepted more places... kind of like Visa? Whereas the California IOU's were not readily exchangeable, they had to be done at an approved exchange? I think I remember some blackmarket stories about those CA IOUs.
I prefer the elected idiots be paid directly by taxpayers lining up to throw various denominated rolls of coinage at them. Preferably said elected idiots would be tied securely to walls with targets painted on them. Sort of like a carnival game.
Hell, the state could charge people a small premium for extra tight pre-rolled coins on site. It's a win win baby!
Brilliant! I love it.
My Eisenhower's would be rolled 500 long
Good idea, put a bill on the floor to issue Senators and Reps all IOU's for their earnings, and take the money they would have gotten and send it to the states for unemployment benefits. How well do you think that will go over? Then you see the real faces of Congress.
It might fly if we include a rider that allows them to legally pay themselves whatrever they choose from their bribery fund....erm...election campaign funds.
Can't wait to find out who the biggest IDIOTS in this idiot-land are (i.e. morons who will buy these bonds). Perhaps the Texas governor will personally sign each bond certificate with "Thank you morons!"
They will be redeemable in Texas Dollars. Just wait for all the Texas nationals waiting in line to buy those bonds!
To save paper, and therefore money, he could simply write and sign the bonds on the back of each new death warrant that is executed. This might actually give them some real recovery value in the event of a default.
Somebody finally said it. Who is stupid enough to buy these bonds? The governments are broke.
A slight correction if I may.
"The governments are broke"
Might be "All Governments are broke".
And the only question I have after that is ........
If "All Governments are broke" who do they owe the money to?
In short .......
What the fuck is going on.
I assume it is going to be your company's Pension Fund manager.
Perhaps expiring unemployment benefits will wake the sheeple up. One can only hope...
dont count on it. sheeple are sheeple for a reason. and history's example of getting sheared over and over and over and over kind of proves it. Belief in the govt & elected people will get you sheared every time.
The Government (the Owners) will offer them cake (Government cheese).
Only when the Government cheese runs out will the people wake up.
The Government will probalbly give them sheep's cheese.
Not as long as American Idol is on TV and there is beer in the stores.
If the entire state of Texas is upside down for 2 Billion for unemployment, I wonder what California is looking like? 2 Billion might not take care of L.A. County.
Florida owes a lot to the feds also for a depleted fund...
Expiring unemployment will make the Mexicans go home...finally.
The illegals aren't the ones on unemployment the 3rd ward is, and if all the illegals went home the people from the 3rd ward wouldn't fill those jobs anyways they would just riot.
Mexicans work here, they get it...Now the 3rd Ward and the Katrina Plauge can only be dealt with after all handouts are ended.
Wow!
I thought Texas was the quintessential Republican state, the hub of conservative ideology in America. And now they're selling bonds to give benefits to the unemployed after the well ran dry?
It appears that fiscal conservatism is just some strange right-wing abstraction, used primarily by politicians and pundits to draw a distinction between the left/right. In reality, when it comes to handouts, the Republicans are just as pathetic as the Democrats - perhaps more so, because they sell themselves as the exact opposite.
Or perhaps Texas doesn't allocate an endless supply of money to UE and follows it percribed budget. However because of the lack of growth in this economy, Texas requires more money for the kitty than originally thought.
Indeed, they don't just print money and give out condoms and food stamps on the corner like the tard states do.
A laughable attempt. Is that your best shot?
He's a cheerleader for the Party of Government who pops up from time to time to insert his sniveling ideology.
I don't know why he thinks this is the place to toe the party line and repeat what he learned from Jon Stewart...
Oliver! ("Boy For Sale" reworded)
One State,
State for sale.
It's going cheap.
Only seven gold coins.
That or thereabouts...
If I should say it wasn't very greedy,
I could not, I'd be telling you a tale.
One State,
State for sale.
Come take a peep.
Have you ever seen
As nice a State for sale?
Blaming Odummo for the problems in Texas is way off the mark. This country is full of poorly educated and lazy people. Too many feel they are entitled to a paycheck regardless of their lack of initiative or poor education. You reap what you sow.
In the case of educated people like Engineers, many have either devolved into paper pushers or let their skills become so dull or obsolete they cannot compete anymore. People have all the time in the world to watch TV, surf the web and party but they never seem to have time to improve and hone their skill sets. They put in 8 hours and then turn off their brains. It is the norm for people applying for a job to present a embellished resume and outright lie about their skill sets. It only takes a few questions to sort out the posers. Again you reap what you sow.
They did a check at a few big companies and most employees had lied on their resumes but none were fired after the discovery - so they were basically rewarded for lying and probably would have never got the job without lying...
....
You want to know why (software) engineers lie on their resumes? Because you dingbats in HR put stuff like "10 years exeprience with Windows 2003" or "new applicants must be familiar with CUSTOM_INHOUSE_PROGRAM" on your requirement wish lists. Or because you won't even look at resumes for people coming out of college. Sorry, you need 10 years experience to install printers or answer phones but also fuck you if you're over 45 because then you're too old for anything. Christ, if/when I find myself job hunting again, I'll treat that ridiculous game with all the respect it deserves, somewhere between Three Card Monty and Hungry Hungry Hippos.
Yeah, you're absolutely right, we should blame the peons. That always works great.
I'm curious... How much does it cost the state to have Citi/BofA issue these bonds?
Wait! I thought Texas was a red state that didn't have any of these librul budgetary woes?!?
Perry is an idiot, part of the careening clown car problem we have with all the current politicians on both sides of aisle. He is a blossoming flower in the idiot orchid. Perry rolled over on AZ, emphasised a state's right bill and then took the Fed Money. He is almost as big as charlatan as Obummer. Obama will not win the oil drilling moratorium, this game was inevented in the oil fields and the judges know how to play it. Oil industry has been public enemy #1 for a long time, so this is just a fire drill. Oil companies have something that DC doesn't have, cold hard cash coming in daily, ensures things to go smoothly.
Besides fire ants and tornadoes, Texas has plenty of women, food, tequila and guns, lots of guns. And we are all getting pissed off at both Reps and Dems...
I suggest that the Zero Hedge Mulligan's Valley/Galt's Gultch SHTF bug-out retreat should be Shiner, Tx.
http://www.shiner.com/
Agreed, Shiner Bock is fantastic.
If it aint in Texas it aint....
well... *Kicks a rock down the road.
Anyhoo... I spent time in Texas over the years and find them to be a strong and generous people. Some areas are pretty strong. Never mind the Government and thier problems.
It will be interesting to see how the Population reacts when they begin to trade home grown crops, trade each other and teach skills and help each other out rather than relying on the tired and worn out system of debt spending.
The joke isn't "Ha, ha, Texas is issuing bonds to cover unemployment costs." The joke is "Holy crap, if Texas has to do this, how bad is it in other states?" Relative to almost every other state, the Texas economy is doing well - housing prices "only" went down 10%-20%. Relatively few bank closures, etc.
I work near a Workforce Commission office -- trust me, it ain't illegals using (or abusing) the system.
Arkansas has borrowed money to cover the Unemployment from Uncle Sam and you should see the people inside the UI Building. All kinds. Some of whom who never would have thought that THEY, the chosen ones would be standing there.
If most States did borrow to cover checks this week pending paybacks or more borrowing from Uncle Sam to keep this going then that means bankrupcy. If the Interest kicks in increasing the amount the states need to repay while still borrowing money to keep the phesants happy then Uncle Sam will break if not already.
When no one has money anywhere to pay existing claims, appeals or new claims... then... everyone is broke.
What then?
Only those who are debt free and have savings will live for a while, provided they don't get discovered by the hungry masses who cannot get a loaf of bread at the store.
Possible ideas for Texas bond collateral:
1)Washed up crude oil (bring your own skimmer)
2)Organs of executed criminals (bring your own scapel)
How stupid do you have to be to go broke when you have the power to tax?
There is certainly power to tax. But how can you tax a unemployed person who has no income or whose income has run out?
Edited.
It is difficult to impossible to realize real tax revenue from a population living in your town, county or state when everyone is making minimum wage or is on unemployment or even not part of your economy anymore having quit looking for work all together.
Or, even picked up and moved out by choice or by strategic default.
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