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California To Run Out Of Cash In One Month, Controller Warns

Tyler Durden's picture





 

If anyone is tired of the daily European soap opera with surrealistic tragicomic overtones, they can simply shift their gaze to the 8th largest economy in the world: the insolvent state of California, whose controller just told legislators has just over a month worth of cash left. From the Sacramento Bee: "California will run out of cash by early March if the state does not take swift action to find $3.3 billion through payment delays and borrowing, according to a letter state Controller John Chiang sent to state lawmakers today. The announcement is surprising since lawmakers previously believed the state had enough cash to last through the fiscal year that ends in June." ....uh, oops? But sure, fix the problem of excess debt by more "borrowing" why not. As for the math: "But Chiang said additional cash management solutions are needed because state tax revenues are $2.6 billion less than what Gov. Jerry Brown and state lawmakers assumed in their optimistic budget last year. Meanwhile, Chiang said, the state is spending $2.6 billion more than state leaders planned on." Quick, someone come up with a plan that involves subsidies and tariffs on China, or something else that deflects from what the source of the problem really is. Because the last thing that anyone in America would want to bring up is this thing called "responsibility" for their actions, or, as in now becoming the default case, the lack thereof. And why do that, when time spent so much more productively scapegoating this, and blaming that for one's own massive errors of judgment.

From the Bee:

The Assembly budget committee is considering a bill today that would enable $865 million of borrowing from existing state accounts, Senate Bill 95. Chiang, after consultation with the Department of Finance and state Treasurer Bill Lockyer, is also seeking about $2.4 billion in delayed payments to universities, counties and Medi-Cal, as well as additional borrowing from outside investors.

 

Absent these actions, the state would fall below its prudent $2.5 billion cash cushion on Feb. 29, Chiang estimated. On March 8, the state would actually end up $730 million in the red. The state would be below the safe cash cushion for several weeks ending April 13, save for several days at the end of March.

 

With such actions, Chiang believes the state would not have to use IOUs or delay tax refunds, maneuvers that have been relied upon in previous years. But Chiang also said that "more cash solutions may be required if our revenues continue to erode or if disbursements significantly exceed estimates."

So 3 years after Lehman filed for bankruptcy, everyone in the world continues to be terminally insolvent, but because everyone is in the same boat, everyone pretends not to notice and the best thing is just to blame Meredith Whitney for telling it like it is, if not getting the timing quite right? But at least the Fed isn't about to print up a tsunami of dollar-equivalent ones and zeros.

 


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Tue, 01/31/2012 - 16:16 | Link to Comment HelluvaEngineer
HelluvaEngineer's picture

* bullish *

Tue, 01/31/2012 - 16:17 | Link to Comment nope-1004
nope-1004's picture

Again?  Didn't they run out of cash 8 times before?

LOL.

 

Tue, 01/31/2012 - 16:20 | Link to Comment tekhneek
tekhneek's picture

It's almost like this is going to keep happening over and over and over again.

Tue, 01/31/2012 - 16:47 | Link to Comment trav7777
trav7777's picture

we simply NEED more Mexicans in california as the budget arc with cradle-to-grave socialism works best the more diversity we have.  It's always the answer.

Tue, 01/31/2012 - 16:50 | Link to Comment Clueless Economist
Clueless Economist's picture

But Chiang said additional cash management solutions are needed because state tax revenues are $2.6 billion less than what Gov. Jerry Brown and state lawmakers assumed in their optimistic budget last year. Meanwhile, Chiang said, the state is spending $2.6 billion more than state leaders planned on."

As an accredited Keynesian Economist, I applaud this type of planning.  The solution is quite simple, doing some quick calculations California should borrow an additional 5.2 BILLION $

The solution to the debt crisis is more debt.

--Nobel Winner P. Krugman

Tue, 01/31/2012 - 17:08 | Link to Comment VanillAnalyst
VanillAnalyst's picture

I don't see what the problem is here. Can't Ben just send them a check?

Side question, do pension fund liabilities typically have inflation guards in them? No? Ha ha!

Tue, 01/31/2012 - 17:15 | Link to Comment tekhneek
tekhneek's picture

Or they could just borrow it from MF Global... oh wait...

Too soon?

Tue, 01/31/2012 - 17:23 | Link to Comment Manthong
Manthong's picture

Well, if Mexifornia just drives some more businesses out of the state with additional onerous regulations and laws, maybe they can make up the difference in decreased requirements for state and local services.

Oh, and if they tighten up their firearms control a bit more, they can save from the reduced need for law enforcement. 

Tue, 01/31/2012 - 17:58 | Link to Comment Max Hunter
Max Hunter's picture

I've already seen this movie.. Everything will be just fine.. Until it isn't.. :)

Tue, 01/31/2012 - 18:06 | Link to Comment economics1996
economics1996's picture

Let California for its own country.  Adios.

Tue, 01/31/2012 - 18:25 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

If that happened there would be an instant Civil War between NorCal and SoCal.

Tue, 01/31/2012 - 19:13 | Link to Comment TruthInSunshine
TruthInSunshine's picture

California is the harbinger of things to come for the rest of the nation, whether what fashions will be trendy, foods will be trendy, and even what financial conditions will be washing over the rest of the nation, like a slow moving weather front, usually with a lag time of 6 months to 18 months, at most.

California will now pay its workers and contractors with worthless IOUs, and they'll probably dish out state income tax refunds with worthless IOUs, also, just like before, while demanding Uncle Ben Bernanke's toilet paper for payment from the debt serfs.

California also has the world's 8th largest economy, about the size of Italy's - but much of its valuation is derived from real estate and REs associated services, so there's PLENTY of fake numbers there with further room to fall - again, much in common with Italy there too, financially speaking.

Tue, 01/31/2012 - 20:22 | Link to Comment Xkwisetly Paneful
Xkwisetly Paneful's picture

Their credit rating like Illinois is on par with corp junk.

Why they refuse to open casinos and instead let all of that money flee to Nevada is mind boggling.

Tue, 01/31/2012 - 21:29 | Link to Comment Michael
Michael's picture

I'm just glad California has the Democrat Governor Jerry Brown to solve all their problems for them.

Wed, 02/01/2012 - 06:43 | Link to Comment StychoKiller
StychoKiller's picture

You most definitely get the Govt you deserve, especially if You're California!

Wed, 02/01/2012 - 02:05 | Link to Comment Hans Gruber 1962
Hans Gruber 1962's picture

Just moved my company to Nevada at the end of last year.......gee, I hope I wasn't the straw that broke the ...................RIP CA!!!

Tue, 01/31/2012 - 17:21 | Link to Comment VanillAnalyst
VanillAnalyst's picture

Too late.

Tue, 01/31/2012 - 17:47 | Link to Comment Thomas
Thomas's picture

California State Motto: At least we're not Illinois.

Tue, 01/31/2012 - 18:11 | Link to Comment Manthong
Manthong's picture

Must have lifted that from Illinois: At least we're not California.

Tue, 01/31/2012 - 18:59 | Link to Comment beachdude
beachdude's picture

Original California State Motto: At least we're not Mexico. Oh... wait... uh...

Have lived at the SoCal beaches my entire life. There were bumper stickers in the '80 that were wildly popular that read:

"WELCOME TO LOS ANGELES. NOW GO HOME." and WELCOME TO CALIFORNIA. NOW GO HOME"

I'm thinking about producing some and re-introducing them. Think I'll be called a racist?

Tue, 01/31/2012 - 19:15 | Link to Comment Cpl Hicks
Cpl Hicks's picture

Forget about the stickers- with a name like 'beachdude' you've got to be a recist.

How can you be so insensitive?

Tue, 01/31/2012 - 20:49 | Link to Comment stocktivity
stocktivity's picture

probably....and your tires will be slashed.

Tue, 01/31/2012 - 22:09 | Link to Comment He_Who Carried ...
He_Who Carried The Sun's picture

...and the women taken....  Gov. Arnie was right. He saw it comin'...

Wed, 02/01/2012 - 02:27 | Link to Comment Mr.Bigfoot
Mr.Bigfoot's picture

I was born and raised in CA.  Made the smartest move of my life by moving to Texas.  As they say around here..., "I wasn't born in Texas, but I got here as fast as I could!"

Wed, 02/01/2012 - 06:44 | Link to Comment StychoKiller
StychoKiller's picture

Dang!  When Sasquatch deserts ya, you're close to rock-bottom! :>D

Wed, 02/01/2012 - 19:27 | Link to Comment beachdude
beachdude's picture

The bumper stickers were a commentary on overcrowding. L.A. population exploded in the '80's and there was a strong reaction from those who had been here in the '60's and '70's.

This time it would be a commentary against the "Reconquista". Look it up. I'll live alongside anyone, but remember...

This is the UNITED STATES OF AMERICA, not Meh-hico. Close the borders and form a line for immigration.

Tue, 01/31/2012 - 19:46 | Link to Comment Red Raspberry
Red Raspberry's picture

Chicago says...

 

With the G8 and NATO conferences this summer, and the increase in fines, speed cameras and dog registrations we will cover Illinois.....

Tue, 01/31/2012 - 17:49 | Link to Comment Thomas
Thomas's picture

BTW-Big state; lots of electoral votes no problem.

Tue, 01/31/2012 - 18:13 | Link to Comment Manthong
Manthong's picture

Same with Illinois..  and if the U.I.C. (Usurper-In-Chief) can spring billions for cronies and their bogus green companies, he can spot CA and IL enough to keep them good untill the election.

Tue, 01/31/2012 - 22:08 | Link to Comment swamp
swamp's picture

UIC = He, can't do a damn thing. It's OUR money. OUR money. 

Wed, 02/01/2012 - 10:36 | Link to Comment Kobe Beef
Kobe Beef's picture

Technically it's the Fed's money. It's just our FUTURE being tossed down the drain.

Wed, 02/01/2012 - 10:40 | Link to Comment Kobe Beef
Kobe Beef's picture

Dont forget the Cash for Bastards & Anchors for Aliens federal transfers to CA & IL. That's a lot of spending.

Tue, 01/31/2012 - 17:57 | Link to Comment Whiner
Whiner's picture

Corzine ( just bundled $550M for Obummer ) and The Squid are to ba called in for solution with currency swaps involving Caleefornya IOUs and Greek drachmas. No need to borrow more, Gov Moonbeam.

Wed, 02/01/2012 - 06:56 | Link to Comment Caggge
Caggge's picture

Better yet, Cali could hired MF globals accountants. They can make all the debt vaporize.

Wed, 02/01/2012 - 06:56 | Link to Comment Caggge
Caggge's picture

Duplicate!

Tue, 01/31/2012 - 17:08 | Link to Comment Comay Mierda
Comay Mierda's picture

only one way to a budget surplus in CA - legalize weed, tax the shit out of it

Tue, 01/31/2012 - 17:37 | Link to Comment Matt
Matt's picture

only one way to a budget surplus in CA - spend less than you collect in taxes.

There, FTFY.

EDIT: WTF, strike-through shows on edit but not when posted?!

Tue, 01/31/2012 - 17:46 | Link to Comment Financial_Guard...
Financial_Guardian_Angel's picture

Same thing happens to me.

I like the strike-through, wish I could use it.

Tue, 01/31/2012 - 17:56 | Link to Comment PrintPressPimpin
PrintPressPimpin's picture

Oakland decided to take that plan and run with it... It was great revenues and business streamed into Oakland.. Oakland was called oaksterdam for a reason!! my gf got a card and its almost comical going to the dispensaries. Theres no reason too..  You can save almost 50% by using the web..  Unfortunately it looks like obongo and co are taking in interest in harassing our 215 patients.  As a result the state and municipalities are probagbly looking at some decreased revenues from prop 215 mj compared to last year..  Part of the beauty of the 215 legislation is it allows awesome sites like budtrader and craigslist to be able to post p2p adds offering medical mj.   So far it seems legit selling clones, bud, hash etc on what is essentially the black market as long as you have a card... if you live in ca you should check it out shits so cash.. unlike the IOUs the state is going to be handing out to its workers..

Tue, 04/24/2012 - 06:59 | Link to Comment casamader
casamader's picture

 No amount of reshuffling the cards or rearranging the deck chairs will refloat this barge.  All Ponzis have a shelf life.  Ca is at it's end.  Hey, maybe it's time to raise taxes.  casas prefabricadas

Tue, 01/31/2012 - 19:19 | Link to Comment Cpl Hicks
Cpl Hicks's picture

Think about it.

If you tax the shit out of weed you're still going to have the smugglers and the illegal growers.

I know I won't shut down my distribution network.

Tue, 01/31/2012 - 20:38 | Link to Comment FrankDrakman
FrankDrakman's picture

If you tax the shit out of weed you're still going to have the smugglers and the illegal growers.

Oh, please. You could use the same argument for booze, but where are all the illegal distillers? Oh, right..

The gov't just sets the initial price low relative to today's market to eliminate the windfall profits, meanwhile jacking up sentences and fines for black market sales. Once the dealers have virtually disappeared, gov't slowly ratchets up the price.

We saw the same thing here in Canada for a while with smokes. The gov't taxed them so much, black market smokes started appearing (supplied by Indians - er, aboriginal Canadians - who aren't subject to our federal duties), sold out of the backs of vans or under the counter. A few well publicized $10,000 fines later, the black market smokes virtually vanished. When your profit is only $5 on 200 smokes, why bother taking the chance?

Tue, 01/31/2012 - 17:24 | Link to Comment NumberNone
NumberNone's picture

Cha-Chiang.

Wed, 02/01/2012 - 06:40 | Link to Comment StychoKiller
StychoKiller's picture

Pretty sure that Illinois will be happy to lend them some scratch...:>D

Tue, 01/31/2012 - 17:32 | Link to Comment Matt
Matt's picture

Or Hong Kong / Taiwan Chinese: just adapt the municipal plan to State level, buy $100,000 in State bonds, get a green card.

Tue, 01/31/2012 - 21:20 | Link to Comment Van Halen
Van Halen's picture

What California needs is a (now estimated to be $100 billion) high-speed choo-choo!

Tue, 01/31/2012 - 16:37 | Link to Comment Poetic injustice
Poetic injustice's picture

Hey, if you get paid every time you ask for more money, who would refuse to do it again and again?
I mean, it's not like there would be austerity measures and restructuring required.

Tue, 01/31/2012 - 17:28 | Link to Comment I Got Worms
I Got Worms's picture

The smuggest, most pretentious motherfucker I know lives in San Francisco - I would love to hear reports of him having to take a crap in a 5 gallon bucket and lug it around the Presidio when his municipal water gets shut off.

Tue, 01/31/2012 - 17:52 | Link to Comment sgorem
sgorem's picture

i first thought you were talking about Nancy "the pig" Piglosi", no? fuck californicate!

Tue, 01/31/2012 - 16:53 | Link to Comment Uncle Remus
Uncle Remus's picture

It's almost like this is going to keep happening over and over and over again.

When I get to the bottom I go back to the top of the slide
Where I stop and I turn and I go for a ride
Till I get to the bottom and I see you again.

[...]

Look out helter skelter
She's coming down fast.
Yes she is.
Yes she is

Tue, 01/31/2012 - 19:21 | Link to Comment Cpl Hicks
Cpl Hicks's picture

The one-time theme song of Charlie and the Family.

Wed, 02/01/2012 - 06:48 | Link to Comment StychoKiller
StychoKiller's picture

Manson is probably ROTFLHAO!

Tue, 01/31/2012 - 17:09 | Link to Comment BLOTTO
BLOTTO's picture

Thats because history is merely repeating itself.

Nothing New, Under the Sun...

Tue, 01/31/2012 - 17:54 | Link to Comment greensnacks
greensnacks's picture

Just wait until the federal government actually cuts their spending and delivers less tax revenue to California. Then it will happen all over again ... a few more times.

Tue, 01/31/2012 - 18:41 | Link to Comment Muddy1
Muddy1's picture

As for the math: "But Chiang said additional cash management solutions are needed because state tax revenues are $2.6 billion less than what Gov. Jerry Brown and state lawmakers assumed in their optimistic budget last year. Meanwhile, Chiang said, the state is spending $2.6 billion more than state leaders planned on."  As Californicate goes so goes the US.

Today the word from the CBO is that FY2012 and FY2013 US GDP will be lower than expected, and much lower than the 5% Obummer predicted in his deficit reduction efforts/economic growth forecasts for future FY's.  FY2013 GDP is expected to be 1%, due to implementation of Obamacare.  We are screwed.

Wed, 02/01/2012 - 01:16 | Link to Comment derek_vineyard
derek_vineyard's picture

The RAN's needed as a bridge will probably yield approx 1% .......... reflecting the huge appetite for fixed income from a quality (lol) source

Wed, 02/01/2012 - 15:20 | Link to Comment robertsgt40
robertsgt40's picture

Memo to Chaing: No amount of reshuffling the cards or rearranging the deck chairs will refloat this barge.  All Ponzis have a shelf life.  Ca is at it's end.  Hey, maybe it's time to raise taxes.  Can't wait to see how you protect Fort Hollywood 

Tue, 01/31/2012 - 16:21 | Link to Comment CvlDobd
CvlDobd's picture

I was wondering why PCK was at 52 week highs today. Because it's opposite day, duh!

Tue, 01/31/2012 - 17:03 | Link to Comment The trend is yo...
The trend is your friend's picture

Pimco's so smart they have none of the crappy issues, they figured out a way to hedge against everything

Tue, 01/31/2012 - 16:52 | Link to Comment LookingWithAmazement
LookingWithAmazement's picture

Indeed. Panic for nothing. As ever.

Tue, 01/31/2012 - 17:26 | Link to Comment EvlTheCat
EvlTheCat's picture

Watch out everyone there is a speed bump here...

Tue, 01/31/2012 - 17:59 | Link to Comment kito
kito's picture

@looking...clearly you are not familiar with that whole exponential growth thingee, where it looks like nothing is happening, until it actually happens. many extinct civilizations have followed your logic....... you should check out chris martensons fenway park analogy...you will really like the part where fenway park is 93 percent empty after 45 minutes of doubling drops of water from an eyedropper every minute, yet at the 49th minute, the ENTIRE PARK IS FILLED WITH WATER. keep sitting there Lookingwithamazement, keep sitting there...........

Tue, 01/31/2012 - 18:32 | Link to Comment Garth
Garth's picture

That's the "physics" scenaro with no other people in the park.  With real people in the park you have to consider what they will do and plan to leave before it's too late to get out due to others trying to get out block the paths to the exits.

That's when (or before) the first puddle shows up in the field.

Consider that at 49 minutes - 1 minute the park is already half full, -2 minutes 1/4 full, -3 minutes 1/8 full...

Where are we in this -- should you be out already?

Where's the exit?

 

Tue, 01/31/2012 - 18:12 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

The big problem occurred about a month ago.  The state's autotrigger cuts activated when revenue came in low.  They were required to chop $1 billion from MediCal, by law (it was in the budget agreement of July).

The state did the chop as required by law.  MediCal patients sued to prevent the chop.

AND THEY WON.  About 700 million dollars.

The court forced California to spend that money.  The ruling was that the chop would decrease MediCal care levels below Federal requirements.

That money doesn't exist.  The state is appealing the ruling, but that was the opening shot of the war between judges and mathematics, and that ruling is presently in force.

THAT is why they are coming up short today.

Tue, 01/31/2012 - 18:18 | Link to Comment JLee2027
JLee2027's picture

And here we have the end of socialism.  Courts have no business deciding budget matters like this, and should not be involved. They will ALWAYS side with the "injured" party and not the taxpayer.  

I would called the Judge and told him to send me 700 million or drop dead.  His order is unforceable.

Tue, 01/31/2012 - 19:20 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

 

Nope.  The judge can command that Federal guidelines be complied with.

The correct response is not to defy a judge's order.

It is to defund any court efforts that hear suits against the state of Calif.

Tue, 01/31/2012 - 19:57 | Link to Comment Janice
Janice's picture

Well, it looks like stacking the courts with liberal judges will come back to bite you in the butt. Looks like Arthur left just in time.

Tue, 01/31/2012 - 18:27 | Link to Comment J 457
J 457's picture

End the PROP 13 nightmare and CA. would bridge the budget gap.  Can't have granny living in her $2mm San Jose mansion paying a thousand a year in taxes while everyone else pays 1-1.5%.  Brown was supposed to fix this and the unions, but just like Obama, hasn't touched the politically charged issues. 

Tue, 01/31/2012 - 19:47 | Link to Comment Arcturus
Arcturus's picture

I guess you bought at the top!

 

Not every granny is living in an overpriced McMansions in fact I would say most are not. But, that sure does help with your lame argument about prop 13. 

Tue, 01/31/2012 - 21:01 | Link to Comment Rearranging Dec...
Rearranging Deckchairs's picture

Not just Granny. Remember there is a parent child reassesment exclusion alah Prop 58 of primary residence plus a million of assessed value by gift or bequest. So Granny's spoiled kids can just move in and pay the same lowball taxes growing glacially capped by Prop 13. 

 

And the plus a million means that if Granny had the foresight to own any apartment buildings or income producing property then kiddies get that without triggering a reassesment so long as the net value is under a million.

 

Prop 13 was well intentioned to help keep grannie from being reassesed ( taxed) out of her home. But what it and its progeny have turned into is a total distortion of the market.  Add in a step up in basis and a $5 million applicable exclusion amount (from estate / gift taxes)[ $10 million per couple] and well it pays to be a California native with parents or grandparents who have been there forever and happen to own real estate. Totally farked up.

 

Someday soon maybe California will do something sensible like bifurcate primary residence from income producing property with regards to Prop 13 and Prop 58.

 

The most absurd result of Prop 13 is Disneyland v. Universal Studios. I think Disneyland per acre is assessed at 20X the value per square foot as Universal Studios because of change of control/ ownership rules.  How'd you like to compete in the same industry with a radically different carryign cost structure?

 

Tue, 01/31/2012 - 23:20 | Link to Comment J 457
J 457's picture

Actually, I once sold at the top.  But that has nothing to do with Prop 13.  If you owned property and paid property taxes you would understand.  Why should one person in house A that bought 20 years ago and uses the same services as everyone else pay less than someone that bought five years ago and uses the same services.  There is no reason for the disparity.    Talk to your dad, he can fill you in.

Tue, 01/31/2012 - 22:19 | Link to Comment swamp
swamp's picture

Yeah, that's the answer, hate on grandma, not the spendaholic law makers who booted up YOUR taxes for their pensions.

Tue, 01/31/2012 - 20:35 | Link to Comment Chuck Walla
Chuck Walla's picture

They know the scam. Obama wants to be re-elected. He won't get Cali if it spins down the crapper. ergo, somehow, someway, everybody must bail out Cali. Its like Germany being forced to bail out Greece because there is a super-meister over the whole thing with a media ready to perform fellatio at his whim.

Tue, 01/31/2012 - 21:11 | Link to Comment TeMpTeK
TeMpTeK's picture

Meredith Whitney call.... was  a lil premature

Tue, 01/31/2012 - 16:38 | Link to Comment ACP
ACP's picture

I wonder if the local restaurants will start accepting IOUs.

Or maybe the retired state workers can kick in some of their $200k pensions to help out. BWAHAHAAA, that was a joke. The part where they would help out.

Tue, 01/31/2012 - 16:43 | Link to Comment MayerRothschild
MayerRothschild's picture

Technically if they are accepting paper money, they are already accepting IOUs

Tue, 01/31/2012 - 16:59 | Link to Comment tekhneek
tekhneek's picture

Ohhh Rothschild spreadin' the wisdom FTMFW

Tue, 01/31/2012 - 17:15 | Link to Comment Zero Govt
Zero Govt's picture

it's amazing isn't it... the most inept and incompetent career in global history, the political class, and we vote them in as our 'leaders'

God built humans with a marble short

absolutely bloody mindless we continue this rotting sham called Govt

Tue, 01/31/2012 - 22:21 | Link to Comment swamp
swamp's picture

No, I never voted a one of them as my "leader" and I don't subscribe to the propaganda lingo. They are servants, but brainwashed you call them leaders.

Wed, 02/01/2012 - 18:09 | Link to Comment prole
prole's picture

Have you lost contact with reality?

Or perhaps your job is killing people at our master's whim, so you doing a little self-justification?

I'm just asking because I don't see how you could make such an absurd comment perhaps I missed the sarcasm I'm not so sharp.

Tue, 01/31/2012 - 16:35 | Link to Comment pkea
pkea's picture

Does anyone perceive that the top is in a week or so in and after that it's a free fall starting in march?

 

the muni market burst could be that long neglected last straw/ black swan. Just because everyone think that they will get the money they won't... of course, it will be not the only problem in the world, just the impulse. Iran, Russia, China, israel, the EU, the US, Japan. Who doesn't have a BIG  problem now....

Tue, 01/31/2012 - 16:41 | Link to Comment HelluvaEngineer
HelluvaEngineer's picture

Yeah, always another 30 days away...

Tue, 01/31/2012 - 16:49 | Link to Comment Cdad
Cdad's picture

It's a darn good thing the US equity market has absolutely zero forward looking vision.  I think it trades exactly 30 seconds in front of its last step.

Tue, 01/31/2012 - 18:15 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

It trades based on headline reading algorithms.  There is nothing in the algorithm telling the computer that California is relevant to the HFT battle with the other guy's computer.

Tue, 01/31/2012 - 16:56 | Link to Comment Eireann go Brach
Eireann go Brach's picture

Sell all the illegal US trained mexican workers back to Mexico to raise money!

Tue, 01/31/2012 - 17:27 | Link to Comment Matt
Matt's picture

$2.6 Billion revenue shortfall, so we need to borrow $3.3 Billion .... hmm.

$700 million kickback?

Wed, 02/01/2012 - 03:57 | Link to Comment Oppressed In Ca...
Oppressed In California's picture

Burn Baby, burn....this is what Socialism produces.

Tue, 01/31/2012 - 16:32 | Link to Comment Manthong
Manthong's picture

Heck, anybody can run short of cash from time to time..

At least they have been fiscally responsible up to this point.

And a month is FOREVER in the mind of a comptroller.

 

Tue, 01/31/2012 - 16:16 | Link to Comment tekhneek
tekhneek's picture

Just raise your debt ceiling, California. All is well.

Tue, 01/31/2012 - 16:27 | Link to Comment monopoly
monopoly's picture

Good idea. Too bad only countries can do that. States must balance their budget each year. And that is a joke.

Tue, 01/31/2012 - 16:32 | Link to Comment alien-IQ
alien-IQ's picture

Time for a Barbra Streisand benefit concert. Perhaps with a Bette Midler/Barry Manilow reunion as an opening act.

That'll fix it.

Tue, 01/31/2012 - 16:55 | Link to Comment Uncle Remus
Uncle Remus's picture

Herb brownies...

Tue, 01/31/2012 - 17:30 | Link to Comment Manthong
Manthong's picture

More casinos..  new lottery games..  hiring incentives for the porn industry.. legalize brothels.. state stores for weed and crack.

It's California for God's sake.. what ways to generate new revenue could be more obvious?

Tue, 01/31/2012 - 20:30 | Link to Comment UP Forester
UP Forester's picture

Do they still allow their EBT/SNAP cards to withdraw cash at casino ATMs?

Tue, 01/31/2012 - 17:29 | Link to Comment I Got Worms
I Got Worms's picture

Take it easy on Barry Manilow - he recently went all in for Dr. Paul.

Tue, 01/31/2012 - 17:54 | Link to Comment alien-IQ
alien-IQ's picture

Well, I gotta like that about him.

But let's be honest...his music is a GITMO-like experience.

Tue, 01/31/2012 - 20:32 | Link to Comment UP Forester
UP Forester's picture

"It's the hottest spot South of Havana

"Heeere, at the Gitmo-, Gitmo-Cabaaaanaaa.

"Torture and Splashin'

"Is always the Passion

"At the Gitmo-, Gitmo-Cabaaaaanaaaa,

 

"Rush fell in Love....."

Wed, 02/01/2012 - 18:12 | Link to Comment prole
prole's picture

If there are any drones up could they just shoot me now?

Tue, 01/31/2012 - 16:17 | Link to Comment GeneMarchbanks
GeneMarchbanks's picture

'But at least the Fed isn't about to print up tsunami of dollar-equivalent ones and zeros.'

Wheeeeew! I was totally worried there for a sec.

Tue, 01/31/2012 - 16:18 | Link to Comment monopoly
monopoly's picture

Why do I feel like I am on a planet where there is no accountability, no responsibility and no adults. This is all surreal. But I am not surprised. Wail till Tyler checks out Nevada. We are beyond hope, and we have Harry. Ugh!

Tue, 01/31/2012 - 16:20 | Link to Comment HelluvaEngineer
HelluvaEngineer's picture

I am Governor Jerry Brown
My aura smiles
And never frowns
Soon I will be president...

Carter Power will soon go away
I will be Fuhrer one day
I will command all of you
Your kids will meditate in school
Your kids will meditate in school!

Tue, 01/31/2012 - 16:29 | Link to Comment LouisDega
LouisDega's picture

Ill take Going to California by Led Zeppelin

Tue, 01/31/2012 - 16:41 | Link to Comment weimdog
weimdog's picture

Your kids will worship gays in school

Tue, 01/31/2012 - 23:49 | Link to Comment Sheriff Douchen...
Sheriff Douchenik from AZ's picture

That's no joke. Whilst the financial picture continues to deteriorate..Jerry is getting the kids educated on gayness. I guess it's all ok from an MSM perspective then.

Tue, 01/31/2012 - 17:07 | Link to Comment Denver768
Denver768's picture

Enjoying the Dead Kennedy's homage.   I'll be singing that to myself for the rest of the day now.

Tue, 01/31/2012 - 16:34 | Link to Comment lasvegaspersona
lasvegaspersona's picture

"Home means Nevada" everyone sing along, it is our state song, kind on in a sad minor key, Harry does a nice cowboy poet version...ask him

Tue, 01/31/2012 - 20:39 | Link to Comment Chuck Walla
Chuck Walla's picture

Yeah, Nevada takes a Harry one regular.

Tue, 01/31/2012 - 16:36 | Link to Comment pkea
pkea's picture

Could be Meridith right at last? There are some signs that the time has FINALLY come.

Tue, 01/31/2012 - 16:54 | Link to Comment WonderDawg
WonderDawg's picture

She's been right all along. Her only mistake as being early on the timeline. Made her look foolish last year, but those of us who actually look at reality knew all along it was only a matter of time.

Tue, 01/31/2012 - 16:58 | Link to Comment john39
john39's picture

correct... very hard to have anticipated the cabal's ability to manipulate and forstall the inevitable...

Tue, 01/31/2012 - 17:34 | Link to Comment Jena
Jena's picture

Today, about 5,800 Riverside County, California SEIU members (social workers, accountants and nurses) are conducting a one day strike to protest salary and benefit reductions that would help close an estimated $80 billion gap in the operating budget and an unfunded pension liability of $540 million.  The workers are being asked to contribute 3% of their pension costs this year, an additional 3% next year and a further 2% in the year after that for a total of 8%.  An average union member makes $43,000.

http://mydesert.co/xOv1TF 


Riverside County's jobless rate is currently 12.5 %, down from 12.8% compared to the statewide rate of 11.1%.  

http://mydesert.co/zwvgKP 

Tue, 01/31/2012 - 18:30 | Link to Comment LasVegasDave
LasVegasDave's picture

collective bargaining should be outlawed.

You can fire the CEO but you cant get rid of union workers.

why pay a union worker $40 per hour when you can hire three able, willing and competent workers for the same price.

Tue, 01/31/2012 - 18:50 | Link to Comment Jena
Jena's picture

I think at some point the 'tax the rich' mantra will come to include the public worker sector.

Tue, 01/31/2012 - 19:04 | Link to Comment blunderdog
blunderdog's picture

collective bargaining should be outlawed.

Hell yeah, even for the shareholders.  Owners of a company have no business determining how the business is run.

Moron.

Tue, 01/31/2012 - 16:19 | Link to Comment LongSoupLine
LongSoupLine's picture

 

 

Quick, reopen Sutter's Mill!!  Find that gold...(or report to the "media" of a gold find and leverage some "futures").

Tue, 01/31/2012 - 16:30 | Link to Comment NumberNone
NumberNone's picture

Just confiscate Facebook shares as they go public, much quicker than all that messy mine stuff. 

Tue, 01/31/2012 - 16:21 | Link to Comment sabra1
sabra1's picture

so, you're telling me that cali-fornians don't have bank accounts that can be pillfered?

Tue, 01/31/2012 - 16:41 | Link to Comment Poetic injustice
Poetic injustice's picture

I remember seeing link couple of months ago.
Instead of cleaning accounts, they go for "forgotten" bank vaults, cleaning everything of value out.

Tue, 01/31/2012 - 16:25 | Link to Comment Evil Bugeyes
Evil Bugeyes's picture

No problem! According to RetroTrader, the muni market is red hot now.

There will be plenty of money for that $100 billion high-speed rail from SF to LA.

Tue, 01/31/2012 - 17:29 | Link to Comment Matt
Matt's picture

I understand cost overruns, and all low-ball bids always go over budget, but from $9 Billion to $100 Billion? That's a tad bit out of control.

Tue, 01/31/2012 - 20:42 | Link to Comment Chuck Walla
Chuck Walla's picture

I understand cost overruns, and all low-ball bids always go over budget, but from $9 Billion to $100 Billion? That's a tad bit out of control.

 

Not if your friends and contributors are doing the billing!

Tue, 01/31/2012 - 16:22 | Link to Comment sheeple2012
sheeple2012's picture

better use whatever cash they have left to stock up on pepper spray

Tue, 01/31/2012 - 16:22 | Link to Comment SgtSchultz
SgtSchultz's picture

Why not just charge an exit fee for all those taxpayers fleeing the state to get one last massive cash infusion.

Tue, 01/31/2012 - 16:58 | Link to Comment nope-1004
nope-1004's picture

Then no one would leave.  lol.

 

Tue, 01/31/2012 - 16:28 | Link to Comment bob_dabolina
bob_dabolina's picture

One of the most liberal states in ze union. 

You guys catching the trend with liberals and socialism? Keep voting those fuckers in CA

Someone pull a daily of VCTIX or CMF

Tue, 01/31/2012 - 16:32 | Link to Comment Debeachesand Je...
Debeachesand Jerseyshores's picture

Isn't that the truth,just about every Liberal State has run out of smoke and mirrors and it's time to pay the "fiddler".

Tue, 01/31/2012 - 16:44 | Link to Comment Citxmech
Citxmech's picture

Because all those "conservative" states are such a bastions of financial fortitude?

Give me a break.

Tue, 01/31/2012 - 16:49 | Link to Comment Poetic injustice
Poetic injustice's picture

Citxmech, you meant:

Give me a tax break.
/snicker snicker

I do agree that dividing states this way makes not much sense. It's matter of funds, national resources and other things.

Tue, 01/31/2012 - 17:02 | Link to Comment Joseph Jones
Joseph Jones's picture

Disclosure: at the national level I'd prefer both parties be banned for at least 50 years. 

Conversely, at the state level, maybe not.  Utah, largely Rep., has $.5 B surplus.

I detest the pro-war LDS stance that permeats most of Utah.  But Utahans and LDS do better with money than California lunatics/thieves.  Far better.

Incidentally (hint, hint, Romney) LDS theology is that the USA must protect physical Israel against any threat, same as evangelistic churchianity (AKA Zionist Christianity) in general.   

Tue, 01/31/2012 - 21:05 | Link to Comment Calmyourself
Calmyourself's picture

Stop it your confusing them next you will mention ND, Wisconsin, Utah etc.. 

Tue, 01/31/2012 - 18:09 | Link to Comment Whiner
Whiner's picture

Do the Red state v. Blue state analysis and get back to us.

Tue, 01/31/2012 - 20:49 | Link to Comment Chuck Walla
Chuck Walla's picture

 

"Because all those "conservative" states are such a bastions of financial fortitude?

Give me a break."

 

 

Yeah, Indiana has a surplus and Wisconsin is now LOWERING property taxes. What a bunch of fucking phonies. Meanwhile, Michigan still offers up the Liberal Progressive paradise of social justice, all the programs and high taxes as a model for America. We call it Detroit.  Its working so well, Michigan is thinking they wil have to take it over. Conyers calls it racist. Everyone else calls it Socialists vote buyers run amok.

 

Oh, I think Carolina has jobs.  How's Illinois doing?

Tue, 01/31/2012 - 17:56 | Link to Comment CaptainObvious
CaptainObvious's picture

Yeah, I was thinking to myself as I read this article, "So, how's that socialism working out for you, California?"  Yet they keep voting in more social programs and taxing the hell out of businesses.  Insanity is doing the same thing over and over and expecting a different result.  California leaders are certifiably insane.

Tue, 01/31/2012 - 18:30 | Link to Comment Manthong
Manthong's picture

Erin Brokovich should investigate the water in Sacramento.

Tue, 01/31/2012 - 16:23 | Link to Comment apberusdisvet
apberusdisvet's picture

I wonder is they have already raided CALPERS?

So sorry, Mr/Mrs public 20-and-out servant living large on $150k, your monthly check has been reduced to that of the average SS recipient.

Tue, 01/31/2012 - 16:35 | Link to Comment Bay Area Guy
Bay Area Guy's picture

I'm pretty sure that was tried under Ahhhhhnold and the State Supreme Court slapped him down pretty hard on it.  That was one of the many times Ahhhhhnold ended up issuing IOU's in place of tax refunds, welfare checks and the like.

Tue, 01/31/2012 - 17:08 | Link to Comment Joseph Jones
Joseph Jones's picture

Ditto, my recollection from past residence there at that time.  CA or Fed Supremes?  My memory is CA.

Born, raised, worked, and lived in CA for first 50+ years.  Would not live in that poop hole again for anything.  

Driving back and forth visiting CA, west bound on I-80, the moment you cross from NV to CA the pavement changes almost instantly at the state line from pretty smooth (NV) to pure, utter, 3rd world dog poop (CA).  

"Very interesting," as Sgt. Schultz was fond of saying.   

Tue, 01/31/2012 - 22:14 | Link to Comment Bringin It
Bringin It's picture

that was tried under Ahhhhhnold

 

You will need to figure out how to get blood from a stone, because that's what it's coming to.

Tue, 01/31/2012 - 22:17 | Link to Comment Bringin It
Bringin It's picture

The Ponzi will claw back the public pensions through default or inflation.  The Ponzi must be served.

Tue, 01/31/2012 - 16:51 | Link to Comment Raymond K Hessel
Raymond K Hessel's picture

Check to see how much in local munis they own.  That is how confiscation works in the US.  

  • The state issues debt, takes savers' cash, and buys the debt.  
  • The cash from the debt goes to pay for social justice programs.  

This is how moderates have figured out how to transfer wealth from the productive segments of society to non-productive segments without triggering alarms about fascist takeovers.  

It's called boiling the frog.  

It would be a nice graphic to see how much govt pension funds have invested in munis and treasuries over time.

Tue, 01/31/2012 - 17:15 | Link to Comment Joseph Jones
Joseph Jones's picture

Several years ago NPR quoted the percentage of state revenues toward social programs, CA vs. national average.  CA, IIRC, was about 7x the national average.

I know more people suckling on federal aid (SSI, disability) than not.  Many if not all could otherwise do something with their hands...put a mop in someone's hands with a "clean floor or no food" rule...look at the clean floor. 

Tue, 01/31/2012 - 18:16 | Link to Comment Whiner
Whiner's picture

Been going on for a long, long time. My first secretary got busted there in 1970 for drugs, faked termination and went on unemployment letting Caleefornya pay it's own fine in installments. Worked like a charm. It takes a long time to bankrupt a state or nation relative to a biz, but when it happens, eet happen berry, berry pronto. Don't laugh. You and I will pay it back through fed income taxes.

Tue, 01/31/2012 - 16:42 | Link to Comment Poetic injustice
Poetic injustice's picture

I'd buy that for a dollar.

Tue, 01/31/2012 - 17:22 | Link to Comment Joseph Jones
Joseph Jones's picture

$1M CA residence = $1k/mo, $12k/annual property tax + Mello-Roos taxes + many other potential local add-on fees. 

SUCH A DEAL!!!!!!!!!!!!!!!!

DA GOLDEN STATE!!!!!!!!!!!!!

Tue, 01/31/2012 - 18:07 | Link to Comment PrintPressPimpin
PrintPressPimpin's picture

In so much of the Golden state the home owner is the golden goose.   They push hard for that dream of owning a 4000 square foot lot in the suburbs so you can pay the property tax, water power etc...anyone buying a house to live in the suburbs right now is buying into servitude. How things have changed... Think about that same little 1.5 acre lot with the well on it and beater mobile home now and ten years ago..  clearly its much more desirable today if you are trying to get out of the system

Tue, 01/31/2012 - 16:34 | Link to Comment NotApplicable
NotApplicable's picture

Gee, looks like lots of people like her. I wonder who her daddy is?

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