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July California Tax Revenues Plunge More Than 10% Below Expectations

Tyler Durden's picture


Even as the Fed continues to pretend that keeping interest rates at zero for what is now becoming apparent will be an infinite amount of time is an appropriate substitute for the absence for the elimination of actual cash flows, we once again get a reminder that life in the real economy, there were people can not just print their way out of trouble, practical issues such as reality still matter. One such example comes to us by way of California which just announced that state tax revenue plunged in July, falling more than 10% below expectations, and as the LA Times blog says, "making it more likely that deeper cuts to public schools built into the state budget in case of a stalled economic recovery will occur." It adds: "Gov. Jerry Brown and state lawmakers patched up the final $4 billion of California’s budget shortfall this year by hoping for a windfall economic recovery. Those hopes are now fading fast. Tax collections in July were $538.8 million below budget forecasts, according to state Controller John Chiang." And just like the proposed Deficit Reduction Plan will crash and burn courtesy of the completely unknown trillions in yet undisclosed savings, so California is now waking up to a bad hangover after realizing that the deus ex machina in unidentified billions of "revenues" forgot to make an appearance.

Income taxes were up slightly, but sales and corporate collections lagged by a combined nearly $210 million. But the biggest drag was from the unidentified $4 billion that budget writers had banked on.


“Every drop in revenues puts us closer to the drastic trigger cuts that could be imposed next year," Chiang said in a statement. Those automatic cuts include a reduction in schools spending that could shrink the academic year by as many as seven days in some districts.

And unless the Fed can continue to baffle them with bullshit, by declaring that the recession is here, but it is really good for your 401(k), California's troubles are only set to escalate.

Worse, the sagging tax collections were reported before the recent stock market turmoil. The Dow Jones industrial average plunged by more than 600 points on Monday. California relies very heavily on capital gains taxes from the stock taxes.

We are confident California will survive. After all it merely need to tell its taxpayers that courtesy of ZIRP to perpetuity, they all just got much wealthier, and if not, then they should bring their grievances to the Fed Chairman. In the meantime, tax hikes, and spending cuts for the state, which has to have a balanced budget, at least on paper, are imminent.


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Tue, 08/09/2011 - 16:49 | 1543895 Kali
Kali's picture

But, but, but the markets are recovering!  Free unicorn rides, skittles and cotton candy for all!

Tue, 08/09/2011 - 16:52 | 1543918 dlmaniac
dlmaniac's picture

Payback bitchez!!

This is what happens when you drve business owner such as Amazon out of Soviet Unions of California.

Tue, 08/09/2011 - 18:17 | 1544272 linrom
linrom's picture

They have a lot great businesses that Cali residents support. Let's see: GOOGLE, AMAZON,EBAY, FACEBOOK. Great! None of these leeches pay any corporate tax, no sales tax, their customers pay no sales tax. Yet, the stock option wealth transfer  whores demand and require great deal of public services for FREE.

Tue, 08/09/2011 - 18:35 | 1544354 AssFire
AssFire's picture

They give you high paying jobs and the US has one of the highest corporate tax rates. You should be ashamed...No better yet let them all move out- that is what you deserve you friggin parasite.

Tue, 08/09/2011 - 19:10 | 1544491 Bobbyrib
Bobbyrib's picture

Perhaps we should measure the corporate tax rate against what these companies actually pay...


Oh and how are those distribution center jobs for Amazon going in Texas. Friggin' parasites...

Tue, 08/09/2011 - 20:38 | 1544748 sun tzu
sun tzu's picture

How much in taxes do their employees pay and how much do they contribute to the local economy? They're taxed at 10% in California plus property and sales taxes and buying alot of shit since they're all making $250K 

The fact that they pay little corporate income taxes is not their fault. Congress wrote the tax code with those loopholes. Lower the tax rates and get rid of the loopholes so everyone pays the same simple rate. Make them repatriate their foreign earnings at a lower rate so they can bring their money back. Paying some taxes is better than no taxes plus they will pay it out in dividends and the stockholders will end up paying taxes on that income.


Tue, 08/09/2011 - 21:27 | 1544879 Bobbyrib
Bobbyrib's picture

Most of the jobs created in this country are created by small businesses/corporations. Again 10% corporate tax rate doesn't really matter unless they are paying anywhere near 10%. Everyone is making $250K? I should move to California and get a job there.

Congress wrote the tax code with these loop holes, because lobbyists told them to write them in. You want everyone to pay the same simple rate despite how many resources they require from the state (traffic lights, law enforcement, etc)? That's very interesting. Sounds like you want people or other corporations to pay for larger corporations that require more resources.

So you know for fact that tech companies which require a large cash balance sheet will pay out dividends which will make investors pay taxes on that money? Have there been any studies that proves that the repatriation of assets goes directly toward creating jobs (there were actually reports suggesting the opposite)? Let the corporations keep their money overseas, it will only wind up in their executives' and our law makers' (which will make policies worse for the average person) pockets.

Tue, 08/09/2011 - 22:19 | 1545000 Chuck Walla
Chuck Walla's picture

You all really think corporations pay taxes?  What money, what income does a corp have until it sells something?  Whats in the price of the goods sold? Raw materials, machines, buildings, desks, HVAC, computers, transport, warehouses, salaries, profit and tax? Now, who pays for all that?  Could it be the customer? And raising taxes merely pushes up prices to consumers because, no matter what you believe, the buyer pays for it all, every penny.

Tue, 08/09/2011 - 22:29 | 1545020 Bobbyrib
Bobbyrib's picture

The system worked before and can continue to work now. Businesses have almost always passed operating costs to their customers whenever they could.

Tue, 08/09/2011 - 22:54 | 1545068 snowball777
snowball777's picture

What does Goldman produce again? I missed the trucks delivering their inputs and outputs somehow...maybe they work like Willy Wonka?

You have a mysterious faith in the ability of companies to push their margins on to customers without going out of business due to a little thing called flexiblity of demand. Even Exxon knows that's bullshit after a point.

Try again, this time with logic fully engaged.


Tue, 08/09/2011 - 22:59 | 1545075 sun tzu
sun tzu's picture

I'm talking about people at Google and other tech companies in Sillycon Valley. Like I said, lower the tax rate and get rid of the loopholes so everyone pays the same rate. It's better than what we have now where those who can afford an army of lawyers and CPAs end up gaming the system while small and medium businesses end up getting hosed

Tue, 08/09/2011 - 22:49 | 1545059 snowball777
snowball777's picture

Unless they bought a property from a company who locked in their assessment decades ago and are avoiding those taxes via Prop 13; yeah, you thought it was about not tossing the Grannies thieving your SS dollars out onto the street, suckahs.

Tue, 08/09/2011 - 16:53 | 1543922 Eagle Keeper
Eagle Keeper's picture

Shittin skittles and spittin chicklets.!

Tue, 08/09/2011 - 17:13 | 1544012 gangland
gangland's picture

Vee vant zat money, Lebowski. You think veer kidding und making mit de funny stuff?

Tue, 08/09/2011 - 16:52 | 1543900 jmc8888
jmc8888's picture

Woo hoo.  Instead of pushing for Glass-Steagall, they went for going down some of the terrorizing avenues of cut, tax, print...and what do you know....they are even WORSE off. (oh and obfuscate, hide, bullshit with optimism, and iou's)

Go figure!


Tue, 08/09/2011 - 16:50 | 1543903 Iriestx
Iriestx's picture

With the federal government blessed with the ability to print a limitless supply of dollars with little to no repercussions, why does anybody have to pay taxes?

Tue, 08/09/2011 - 17:10 | 1543997 drink or die
drink or die's picture

When the president gets on TV saying that SS checks may not go out, why does anyone pay SS?

Tue, 08/09/2011 - 17:13 | 1544010 Long-John-Silver
Long-John-Silver's picture

That's the reason they don't give you a choice to pay or not. They take it from your pay before you get to see or hold it.

Tue, 08/09/2011 - 23:24 | 1545120 DeadFred
DeadFred's picture

They have guns and have shown they are more willing to use them than we are.

Wed, 08/10/2011 - 02:08 | 1545301 Doyle Hargraves
Doyle Hargraves's picture

for now...

Tue, 08/09/2011 - 17:12 | 1544007 Hephasteus
Hephasteus's picture

Because the fed is involved in a massive 401k cheat. The states are draining them to make up budget shortfalls. The fed is printing the money from nothing to do it. It'll end soon.

Tue, 08/09/2011 - 17:31 | 1544086 Kali
Kali's picture

Two people, in the last week, have told me they could not get their "money" out of the 401k or retirement pension.  One was a lady I was talking to at the coin shop, they wouldn't loan or redeem her money, said her company had been bought by GS earlier this year.  One of my clients this week told me her brother, an Oregon state employee, disabled/retired for awhile, wanted to cash out.  Was told he couldn't cuz "the state didn't have the money".   They've already taken that funny money. 

Echoes of South Park, "and it gone!"

Tue, 08/09/2011 - 17:45 | 1544148 Hephasteus
Hephasteus's picture

It's funny. The first crash is always about the money being gone. The 2nd crash is about the possibility of it ever coming back being gone.
Double dip. Delayed reality.

Tue, 08/09/2011 - 18:35 | 1544353 ElvisDog
ElvisDog's picture

One of the good things about changing jobs is the ability to take control of your 401K. My old job did theirs through American Funds, which gave us half a dozen lame-ass mutual funds and a money market fund that paid negative interest. Now that I have control of my 401K I can do whatever I want with it - gold ETF, currencies, whatever.

Tue, 08/09/2011 - 20:30 | 1544726 nmewn
nmewn's picture

Good advice Elvis.

"One of the good things about changing jobs is the ability to take control of your 401K."

Word up.

Everyone who is still working should have their own personal IRA off to the side to roll their 401k into.

When they get sick of the workload (doing three peoples jobs because of other layoffs) or find something better or get canned themselves having an existing IRA to transfer your money into is one less headache.

Tue, 08/09/2011 - 20:33 | 1544736 Abitdodgie
Abitdodgie's picture

I cannot belive anyone on this site still pays taxes ?

Tue, 08/09/2011 - 22:14 | 1544997 Cathartes Aura
Cathartes Aura's picture

many still vote!! and think voting will make a difference in the "future"!! and still have bank accounts, even at BofA!! every couple of months, there's the "let's do a run on the ATM!!!" - hardcore these posters, hardcore.

Tue, 08/09/2011 - 18:52 | 1544427 NotApplicable
NotApplicable's picture

FWIW, I got a loan against mine just last week from Federated Retirement Solutions.

Tue, 08/09/2011 - 21:21 | 1544861 Montgomery Burns
Montgomery Burns's picture

Your client is full of shit. Oregon PERS, which is the public retirement system here, has rules about when and how you can take your money out. Those rules haven't changed. One thing you can't do is change your mind about how you want to be paid out once you start collecting.

Tue, 08/09/2011 - 17:20 | 1544044 Man Bear Pig
Man Bear Pig's picture

It's necessary for any "legal tender" to circulate over a long period. If there were no taxes, there would be room for alternative/local currencies. But since one can only pay taxes in dollars, the currency remains a necessary evil. (this is, of course, only one explanation. there are many others that all come together to create the big picture).

California should just make their IOUs "legal tender" to pay state taxes. Either accept a reduction in your tax liability, or wait until the cash is available. The people need options, not more legislation!

Tue, 08/09/2011 - 17:45 | 1544147 dolly madison
dolly madison's picture

"With the federal government blessed with the ability to print a limitless supply of dollars with little to no repercussions, why does anybody have to pay taxes?"


There are repercussions.  The federal government pays interest on the money it prints, and has a national debt on the money it prints.

Wed, 08/10/2011 - 02:50 | 1545349 Doyle Hargraves
Doyle Hargraves's picture

The federal gubmint doesn't print money, the federal reserve that is neither federal nor has any reserves prints money and LOANS it to the federal government which is where part of your INTEREST component comes in. The fed could print/make digital dollars to no end tomorrow if they so choose to do so, regardless of what the federal gubmint says.

Tue, 08/09/2011 - 16:50 | 1543904 Eagle Keeper
Eagle Keeper's picture

Lets see the PPT fix that.

Tue, 08/09/2011 - 16:51 | 1543911 Dave Thomas
Dave Thomas's picture

When is S&P gonna downgrade California? It's either them or Nevada first.

Tue, 08/09/2011 - 23:33 | 1545135 DeadFred
DeadFred's picture

Cali already has A- to BBB+ debt I believe but was recently ungraded to stable form negative (by S&P)

Tue, 08/09/2011 - 16:51 | 1543912 Mactheknife
Mactheknife's picture

Ahhhh yes, those pesky little "projections".

Tue, 08/09/2011 - 17:17 | 1544030 CrashisOptimistic
CrashisOptimistic's picture

This is beyond huge, people.

That budget deal they passed has AUTO CUT TRIGGERS that fire if the tax revenue they foolishly projected to appear . . . does not appear.


Now, the really tricky part of that is, in the law that passed stating these auto triggers must fire, they added several clauses shielding the . . . folks you would expect them to shield from any of it if such auto triggers fired.

Which means the $2B will cut much deeper on those they didn't shield.

California is going to have no public services next year.

Tue, 08/09/2011 - 17:21 | 1544049 LawsofPhysics
LawsofPhysics's picture

Release the prisoners! Problem solved, Basteille day bitches.

Tue, 08/09/2011 - 17:47 | 1544159 ImnotPOTUS
ImnotPOTUS's picture


Correction Officers Union and the Prison Dentist pulling in over 1/4 mil a year in pensions would be out of work.
They all can't find work with Blackwater Security Details.

Tue, 08/09/2011 - 18:55 | 1544440 NotApplicable
NotApplicable's picture

Sure they can!

Just as soon as Gov. Moonbeam sells them the prisons.

Wed, 08/10/2011 - 09:14 | 1545784 Iam_Silverman
Iam_Silverman's picture

"They all can't find work with Blackwater Security Details."

Maybe they can outsource all prisons.  I'll bet the Zetas would do an excellent job for lower costs.  Heck, they might even have some folks already on the inside willing to start work immediately!

Tue, 08/09/2011 - 17:50 | 1544167 dolly madison
dolly madison's picture

Screwed by the neos again.  Even in a state with such a liberal government, they still keep the prisoners in jail at all costs and cut off the social services intstead.  That will keep the prison corporations making lots of money.

Tue, 08/09/2011 - 18:13 | 1544259 ImnotPOTUS
ImnotPOTUS's picture

It has more to do with the money multiplier effect in the Prison System is way more cost effective for funding politicians.

Correction Officers, Prison Dentists, Tiral Lawyers, Police Protective leagues, all kick back a chunk of the funds to the legislature to enusre more funds tomorrow.

Social Services sounds good in a sound bite, but they don't kick back campaign funds efficiently, and that is all that matters.

Neos have not made any great inroads with corporate prisons in Cali. Arni tried to offshore the prisoners to flyover states.

Tue, 08/09/2011 - 21:13 | 1544842 Calmyourself
Calmyourself's picture

Shame on you !  You introduced reason into Dolly's narrative..  Now she will have to rethink everything..

Tue, 08/09/2011 - 21:52 | 1544944 Sheriff Douchen...
Sheriff Douchenik from AZ's picture

Don't worry Dolly. Cali's finances are a mess but at least your boy Jerry got gay history as part of the cirriculum now. Once those kids graduate Cali's gonna have some of the best educated kids out there.

Wed, 08/10/2011 - 02:20 | 1545313 Doyle Hargraves
Doyle Hargraves's picture

Must not get out much Dolly, all I see here is EBT cards flashed to the max, section 8 overrunning my county from LA county next door because they have learned to game the system and get paid for living in LA county while not living there. If social services are being cut, I would love to see where. The prison industrial complex is also alive and well. Think of the destruction to the economy if drugs were legalized here (prisons are chock full of drug offenders easily as a majority) probation/parole officers, social workers, prison guards, prison vocational instructors, 'law enforcement', and prison medical staff would be reduced. The prison industrial complex is the kaleefornya economy. Thank gov moonbeam for giving the prison guard union a fat ass contract to keep them ever employed and the ability to cash like several years of leave at their highest rate on retirement. Social services would be ok in kaleefornya if it wasn't so easy to game and abuse/cheat the fuckin' system and have what we have now in this state: the people on the dole plus the state/county/city employees unions are easily in the majority. They can and do essentially vote themselves a raise every election, they are not gonna get my money much longer.

Tue, 08/09/2011 - 21:19 | 1544854 sun tzu
sun tzu's picture

They'll shut down all essential and safety services first and keep all the programs like midnight baketball, free tuition for illegal immigrants, welfare, $250K/yr pensions, $200K/yr paper pushers, $300K/yr fire & police captains, paper pushers, diversity managers, nature coordinators, etc

Wed, 08/10/2011 - 00:10 | 1545195 Things that go bump
Things that go bump's picture

Yes, and then they will burn.  

Tue, 08/09/2011 - 17:53 | 1544186 Man Bear Pig
Man Bear Pig's picture


The Budget recognizes the potential risk to the state's fiscal condition if the higher revenues do not materialize. Under the budget package, if revenues are projected to fall short of expectations by more than $1 billion, an additional $600 million in cuts to higher education, health and human services, and public safety would be implemented beginning in January 2012. If revenues are projected to fall short by more than $2 billion, an additional $1.9 billion in education reductions would be implemented - shortening the school year by 7 days, eliminated the home-to-school transportation program, and reducing community college appointments.


Tier 1 (if revenues fall short of budget act estimate by more than $1 billion)

  • Unallocated reduction to the University of California  $100
  • Unallocated reduction to California State University $100
  • Eliminate State Grants for Local Libraries  $15.9
  • Additional Reduction to the Department of Developmental Services  $100
  • In Home Supportive Services (IHSS) - 20% reduction in service hours  $100
  • IHSS - Eliminate funding for local anti-fraud efforts  $10
  • Medi-Cal - Extend provider cuts and copayments to all managed care plans  $15
  • Unallocated reduction to the Department of Corrections and Rehabilitation (CDCR)  $20
  • Juvenile Justice -- Increase county charge for youthful offenders sent to CDCR $72.1
  • Eliminate vertical prosecution grants  $15
  • Proposition 98 - Community college $10/unit fee increase  $30
  • Child care - 4 percent accross-the-board reduction  $23

TIER 2 (if revenues fall short of budget act estimate by more than $2 billion)

  • Proposition 98 - Reduce 7 days of school  $1,540
  • Proposition 98 - Reduce community college appointments  $72
  • Proposition 98 - Eliminate home-to-school transportation  $248

Robbing the poor to give to the rich... it's *almost* like California wants a growing crime program... If you're in California, it may be time to start planning your departure. There are greener pastures elsewhere.

Tue, 08/09/2011 - 18:50 | 1544419 CrashisOptimistic
CrashisOptimistic's picture

The revenue shortfall in the bill is not the number in the article.

The bill was looking for "better than expected" revenues.  That is, above the baseline.

This number in the article above is Below The Baseline.

So the amount running short is not just the $600 million (FOR ONE MONTH) in the article.  It is that, plus the amount over baseline "expected".  

It's a double whammy, and it's only one month.  August will come in short too after this downgrade, Euro trash and overall crash.

They are going to fire those cut triggers, and you just watch, they will have an emergency session to not let them do anything, because "if we cut and eliminate the programs, then we won't have anything to fund when things improve."


Wed, 08/10/2011 - 00:02 | 1545184 DeadFred
DeadFred's picture

There are already hefty layoffs from most local governments starting July1 which are likely responsible for much of this drop in taxes. When Thanksgiving rolls around and The Super Committee is proposing new cuts California is likely to be on the verge of default. I thought the yearly drama was going to be missing this year when they actually passed a budget on time. Sadly it was based on moonbeams and stardust. Take a look at the mandatory cuts posted above. A two billion dollar shortfall? They routinely have 10-20 billion dollar shortfalls because of the fluff assumptions put in to come up with the mandatory "balanced" budget. Start thinking about investment strategies to deal with the S&P at 1000 and California about to default. How about you Bruce K., you're the guy who could come up with the "Surviving the Thankless Thanksgiving Meltdown" playbook. Something other than silver and lead, most people here have that covered.

Tue, 08/09/2011 - 21:24 | 1544871 sun tzu
sun tzu's picture

What's up brother C/O

Tue, 08/09/2011 - 21:11 | 1544836 Calmyourself
Calmyourself's picture

They will change the law the state is run by Democrats.  Change you can vomit too..  That is why on a Federal basis Balanced Budget Constitutional Amendment makes no sense, lots of way  to go around it. 

Tue, 08/09/2011 - 17:56 | 1544198 Steaming_Wookie_Doo
Steaming_Wookie_Doo's picture

Right, did you catch this: "patched up the final $4 billion of California’s budget shortfall this year by hoping for a windfall economic recovery."

So the budget consisted of hoping it would be better. If I didn't live here, I wouldn't have believed it. Well, I'm sure they'll just close 412 schools and "hope for an academic recovery" as well.

Wed, 08/10/2011 - 00:05 | 1545185 DeadFred
DeadFred's picture

Considering the schools it may be an improvement.

Wed, 08/10/2011 - 02:24 | 1545319 Doyle Hargraves
Doyle Hargraves's picture

Tough to deal with those hopium addicts in sacramento...permanent state of baked thanks to that particular drug.

Tue, 08/09/2011 - 16:52 | 1543917 papaswamp
papaswamp's picture

Wooo that's a big crack in the dam.

Tue, 08/09/2011 - 19:47 | 1544620 Zero Govt
Zero Govt's picture

the Progressives destroy another part of America

T I M B E R !!

Tue, 08/09/2011 - 16:57 | 1543933 youngandhealthy
youngandhealthy's picture

California = Spain

When will they have to leave the US Dollar project?

Tue, 08/09/2011 - 17:14 | 1544018 Long-John-Silver
Long-John-Silver's picture

The same time everyone else leaves it.

Tue, 08/09/2011 - 17:21 | 1544035 schizo321437
schizo321437's picture


Tue, 08/09/2011 - 16:57 | 1543935 SparkySC
SparkySC's picture

Why in hell would they cut anything that is for kids (i.e. School budgets ).

That's insane thinking and governing.

Cut the benefits to the Old.

You're selling out the future of the Country for a bunch of old people who have already taken enough out of the USA benefit wise.

Why short KIDS??????

Give them all they need.

Cut elsewhere.


Old are NOT a Priority.

Young people are.

The Future lies with them.




Tue, 08/09/2011 - 17:00 | 1543958 LFMayor
LFMayor's picture

Because kids don't vote
Kids don't decide to pack up their shit and move out of state

and Charlie DON"T SURF

Tue, 08/09/2011 - 17:04 | 1543971 AcidRastaHead
AcidRastaHead's picture

Our future just got more stupid by 7 days.

Tue, 08/09/2011 - 17:13 | 1544008 Navigator
Navigator's picture


Why would California cut education for kids Sparky?  

Because that's the way Republicans insist it happen and they hold everything in a state hostage in order to get it.  If you haven't seen it yet, it's coming to your state soon.  

Why?  Because Republicans and their corporate owners desperately need votes....and educated adults don't vote against their own best economic interests in order to enrich corporations.

Tue, 08/09/2011 - 17:17 | 1544025 divide_by_zero
divide_by_zero's picture

Pretty funny, you should take a look at opensecrets to see where the Democrat money comes from also(note I said also).  Brown still got an 8% INCREASE in the budget this year. There's billions in phony commissions in this state that are used as political favor payoffs that could be cut but Democrats and RINOS in this state would rather make it painful, as is the usual path.

Tue, 08/09/2011 - 17:19 | 1544033 BayAreaAlan
BayAreaAlan's picture

I don't know what California you have been looking at, but republicans have little input, much less, hostage-taking ability, in California. Yes, they delayed a budget, but caved in the end.

Tue, 08/09/2011 - 17:22 | 1544054 dwdollar
dwdollar's picture

LOL..  you need a '/sarcasm' after that because I know you're just kidding.

Tue, 08/09/2011 - 17:31 | 1544083 SparkySC
SparkySC's picture

Anyone who has cast a vote for a Republican or Democrat in the last 20 years is a complete and utter FOOL.

They're ALL the SCUM-SCOURGE of Society today in the USA.

The 2-Party system is a Fossil.

The worst of the worst are the Wil E. Coyote 'geniuses' that vote strictly down party lines.



The Old Raisins in Congress are what is EXACTLY what is wrong with Society. 

They don't give a crap about what they do, because they're not long for this world anyways.

They pull the old knob Repub/Democrat network B.S. and don't even try to use their ill-firing brainstems.


When there was enough going around, sure you can keep them around so they can go to the casinos in every State and supply these companies with Slot revenue, but now when there isn't enough for everything....




You have to make difficult decisions in times like these, and people should be cognizant that the Old Crones in power will attempt to Take it All with them.  




Tue, 08/09/2011 - 21:21 | 1544863 Bicycle Repairman
Bicycle Repairman's picture

Sparky, the current "education" system is gold-plated compared to 40 years ago and everyone knows it.  The results delivered are not commensurate.  Time to rationalize the system.  Bend over.

Wed, 08/10/2011 - 01:04 | 1545246 Things that go bump
Things that go bump's picture

I have a relative who is a middle school teacher.  She tells me they don't have time to actually teach much these days as most of their time must be spent teaching those poor children how to pass the standardized tests. They no longer teach cursive writing, as there isn't time.  They don't teach how to tell time on a regular clock or how to make change or how to do math without a calculator.  I shudder to think what else they aren't teaching, and what exactly are they teaching in place of the things that were once considered the basic necessities for any child.  

Wed, 08/10/2011 - 02:56 | 1545352 Doyle Hargraves
Doyle Hargraves's picture

Depending on where your relative teaches middle school did she mention how much extra time she has to spend teaching the non native english speaking kids how to speak/read/write english?! Did she also happen to say about how much she gets paid in comparison to other teachers across the 50 states? I think that would probably put the correct spin on that top...

Thu, 08/11/2011 - 01:43 | 1549928 Things that go bump
Things that go bump's picture

She has an advanced degree and teaches reading in Florida.  When she told me she taught reading to middle schoolers, I said surely she taught English or literature, but no, she teaches reading.  Apparently, there are middle school-aged children who are not functionally literate to any useful degree and such children are in sufficient numbers that full-time teachers must be employed in middle school to rectify the deficiency.  She said it had something to do with the students not having grasped the way vowels function. I don't really understand how a child can make it as far as middle school without first mastering that one absolutely essential skill.  

Thu, 08/11/2011 - 12:48 | 1551316 Doyle Hargraves
Doyle Hargraves's picture

Well I guess if you have to employ remedial action to get kids up to speed it kind of explains how adequate the system below that is.

Tue, 08/09/2011 - 17:31 | 1544088 The Hawk
The Hawk's picture

You need to read Atlas Shrugged... I can't even respond to a Californian... The US was not created on the principles of giving money to poor people who didn't take care of themselves.  People who sit on their asses and collect their entitlement checks every month, paid for by the working class.  Those entitlement checks need to be cut by more than half... We live in a freaking nanny state... 

Tue, 08/09/2011 - 18:05 | 1544232 dolly madison
dolly madison's picture

I have read Atlas Shrugged and pure selfishness is not the answer.  You need to watch the Shock Doctrine on youtube. 

We are all fighting over scraps because a few are making it this way.  Quit fighting over scraps, and fight to fix the system.

Tue, 08/09/2011 - 18:20 | 1544261 AssFire
AssFire's picture

Whatever you say Mrs. Rearden..ah, Dolly. You could not have read the novel and still have your attitude. You are talking about fixing CAPITALISM.

The answer is limiting GOVERNMENT, especially it's illegal seizure of half our efforts EVERY YEAR.

Tue, 08/09/2011 - 18:09 | 1544247 AssFire
AssFire's picture

Hawk, I read it and now I'm on the Fountainhead.. I believe it should be required reading. One cannot help but notice this commie shit coming ribbon panels from government institutes and central planners blaiming all ills on the greedy money makers.

With all the money on the sidelines (or in gold) there is no other way to put it: Atlas has shrugged. We may not have a Gualt's Gulch to move to but we certainly have no desire to make more than necessary (especially is it means having 50+ employees) or risking our assets for the sake of the looters.

Tue, 08/09/2011 - 17:13 | 1544011 divide_by_zero
divide_by_zero's picture

Why not? Hasn't been much educating going on here for quite some time, just babysitting and indoctrination.

Tue, 08/09/2011 - 17:45 | 1544150 Mashuri
Mashuri's picture

+1T w/ ZIRP


I can't wait for the day Big Brother's child-indoctrination prison system collapses.  I'll be blasting some Pink floyd when it happens!

Tue, 08/09/2011 - 17:19 | 1544036 CrashisOptimistic
CrashisOptimistic's picture

There is no future.

The kids will be dead soon, along with many older folks.

Why spend money on kids about to die?

Tue, 08/09/2011 - 17:49 | 1544163 Pay Day Today
Pay Day Today's picture

Maybe an Apple Tax is in order. You know, a .8% tax on their cash reserves would cover it.

Tue, 08/09/2011 - 22:31 | 1545027 Cathartes Aura
Cathartes Aura's picture

most likely Jobs & Co. will just set up "foundations" like BillG, where they can do their "global influencing" under the "philanthropy" banner. . .

*cough* useless eaters *cough*

'sides, all these "social networking" devices make the sheep so easy to "tag" now.  god's work, ayup.

Tue, 08/09/2011 - 23:08 | 1545093 sun tzu
sun tzu's picture

Maybe a tax on the government is in order

Tue, 08/09/2011 - 17:21 | 1544053 i love cholas
i love cholas's picture

You are pissing on your future self.

Tue, 08/09/2011 - 17:24 | 1544065 chubbar
chubbar's picture

In case you weren't being sarcastic let me give you an idea of what my local high school is all about.

First, it's brand new, floated on bonds backed by the state gov't which is now backing down from the deal. It is built on land that was owned by one of the local "families" which was bought at the peak of the market at an exorbinate price and built with a budget that would be more likely found in a big city (town of 10K). You can be SURE that no one was paid off and everything was at arms length with THAT transaction!

Besides being "plush" it houses a machine shop that is the envy of any major manufacturer in the state (NH), a greenhouse because kids just HAVE to know how to grow veggies, a day care center so the teenagers know how to raise their illegitimate offspring, an auto shop with no less than 10 lifts and tools that would make ford auto co drool, several fields for the athletics with stands/score boards to boot, a massive auditorium for plays, etc, a computer room that is probably as sophisticated as something at DELL along with all the other incidentals that you can only dream of as a 14yo attending high school. Of course the kids are no better at reading/writing or math, score low on the state acheivement exams and are semi literate as a group but who wants to quibble over that unimportant nonsense?

The teachers just negotiated a 3% pay raise along with the rest of the frauds working there but hey, at least the rest of the folks who are the ones stuck paying their salary just had their property taxes jacked 15% to pay for this shit!

Yeah, by all means protect the kids!   The fucking country can't crash fast enough IMO!!!

I want to see all these fuckers (the adults responsible for this crap) blowing bums down by the wharf for their rent money before this is over!

Tue, 08/09/2011 - 17:37 | 1544113 lunaticfringe
lunaticfringe's picture




Tue, 08/09/2011 - 21:25 | 1544873 Bicycle Repairman
Bicycle Repairman's picture

"I want to see all these fuckers (the adults responsible for this crap) blowing bums down by the wharf for their rent money before this is over!"

I feel your pain.  Post a video on YouTube when you get one.

Tue, 08/09/2011 - 21:45 | 1544912 Matte_Black
Matte_Black's picture

I want to see all these fuckers (the adults responsible for this crap) blowing bums down by the wharf for their rent money before this is over!

Bums down by the wharf can afford to pay for blowjobs? Where does one apply for the position of 'Bum' on this wharf, sir?


Tue, 08/09/2011 - 23:27 | 1545128 kito
kito's picture

funny shit

Wed, 08/10/2011 - 01:17 | 1545258 macholatte
macholatte's picture

Damn near eloquent, Chubbar.


Wed, 08/10/2011 - 01:28 | 1545266 StychoKiller
StychoKiller's picture

So, I gather you're NOT in favor of Public Education being run by the Govt!

Check out: "Some Lessons from the Underground History of American Education"  by John Taylor Gatto, found in "Everything You Know is Wrong",  ISBN 978-1-56731-637-7, pgs 274-287

Wed, 08/10/2011 - 02:29 | 1545325 Doyle Hargraves
Doyle Hargraves's picture


Tue, 08/09/2011 - 19:05 | 1544480 coded language
coded language's picture

Educated, critical thinkers are dangerous. They might catch on to the deep deception at hand.

Tue, 08/09/2011 - 21:26 | 1544877 Bicycle Repairman
Bicycle Repairman's picture

"Education" and critical thinking are not strongly correlated.

Tue, 08/09/2011 - 21:15 | 1544846 Calmyourself
Calmyourself's picture

What the kids need to be educated and what the unions need to be satiated are two very different things.   It is simply back to basics, we did fine with no 30K smartboards in our classrooms, so will todays children.

Wed, 08/10/2011 - 00:07 | 1545186 DeadFred
DeadFred's picture

Old people vote

Kids ride skateboards

Wed, 08/10/2011 - 03:09 | 1545368 Doyle Hargraves
Doyle Hargraves's picture

Cutting 7 days off the school year is just 7 days less of indoctrination coupled with 'diversity' and 'sensitivity' training. Actually made it better so the kids can learn about real life things they will actually use those 7 days they are out of the camps. Of course if they were really serious about stopping the cuts and the 'educators' were serious about educating they would ask their union to take a large enough cut from their salary or even union dues to facilitate those 7 days of 'learning' since they are the highest paid 'educators' in the nation on average, and the hardest to terminate if they are lousy at their job.

Tue, 08/09/2011 - 16:57 | 1543941 kito
kito's picture

how is that CALPERS prediction of 7.75% returns looking these days???? ouchhhhhhh......

Wed, 08/10/2011 - 03:13 | 1545371 Doyle Hargraves
Doyle Hargraves's picture

how is that CALPERS prediction of 7.75% returns looking these days???? Reason number 238 to get the fuck out because CALPERS according to Stanford is $500 Billion short on a conservative estimate. Someone is on the hook for that shit, if you think the libs are not gonna take care to see that their core constituents aren't paid what they were 'promised' by any means necessary I have some good ass hopium to sell you after you get your state tax bill!

Tue, 08/09/2011 - 16:57 | 1543943 jkruffin
jkruffin's picture

So, GOLD $1850 by end of the week?  Sure looks like it from where I am sitting...let's see.

Tue, 08/09/2011 - 17:00 | 1543956 youngandhealthy
youngandhealthy's picture

Rather 1550

Tue, 08/09/2011 - 17:03 | 1543968 Long-John-Silver
Long-John-Silver's picture

That train left long ago.

Tue, 08/09/2011 - 17:14 | 1544013 Debt Rolling
Debt Rolling's picture

Yup. History teaches us that when the gold (or inflation) train starts, it never goes back to the station it departed from, for elementary monetary reasons. In other words, just like a 25¢ comic book or a 75¢ beef sirloin, $800 gold will be history forever. 

Tue, 08/09/2011 - 19:05 | 1544478 NotApplicable
NotApplicable's picture

Don't you feel kind of silly dissing gold, but having to use a number that large? Meanwhile, the 10 year return is now over 500%, making Gordon Brown the World's Biggest Loser.

Wed, 08/10/2011 - 00:08 | 1545191 DeadFred
DeadFred's picture

Wish they still had the green up arrow

Wed, 08/10/2011 - 03:16 | 1545373 youngandhealthy
youngandhealthy's picture

Not at all because Im not dissing Gold. The last 150-200 pts is panic and will be returned. Thats it. Now...long run, probably up.

Tue, 08/09/2011 - 16:59 | 1543949 El Viejo
El Viejo's picture

OK ... Intermission is over. Back to your seats please.

Tue, 08/09/2011 - 16:59 | 1543950 NumNutt
NumNutt's picture

All this bad news and the market keeps going..... up? Man how long before BAC announces they are filing for protection and their stock will go through the roof? Does any of this make any sense to anyone? Other then TPTB are scrambling to reserve a spot on one of the last flights out of the country before we slide into chaos.....

Tue, 08/09/2011 - 17:04 | 1543975 El Viejo
El Viejo's picture

Yeah, That's why no QE. Uncle Ben is saving his sheckles to bail out BAC and C.

Tue, 08/09/2011 - 17:04 | 1543978 kito
kito's picture

bove says bac is a bargain. wonder what tyler has to say about that?

Tue, 08/09/2011 - 17:01 | 1543959 Debt Rolling
Debt Rolling's picture

The final leg of the collapse begins. 

In 2015, guaranteed pensions and public sinecures will only be a bittersweet memory. 

Tue, 08/09/2011 - 17:01 | 1543961 digalert
digalert's picture

Yep, that's how the dems here in Kalifornia do it...

"hope for a windfall" just like big bro Barama.

Tue, 08/09/2011 - 17:01 | 1543963 Long-John-Silver
Long-John-Silver's picture

But they raised taxes, what the fuck happened? /SARC

Tue, 08/09/2011 - 17:05 | 1543982 Debt Rolling
Debt Rolling's picture

We all knew that raising taxes generally do not increase tax revenue over a year timespan, but it has been reduced to an instant timespan in our globalized and digital world, where capital moves freely. 

In fact, in today's world, raising taxes, even by a small amount, achieves exact inverse effects on what was wanted, because it encourages businesses who long considered to move to "do it now". 

Tue, 08/09/2011 - 17:52 | 1544178 Pay Day Today
Pay Day Today's picture

Seriously, where the heck are these businesses going to move to? Nevada? The bulk of operations activity has already moved to China out of Silicon Valley, leaving design offices and paper shufflers behind.

This offshoring of the tax base is a serious part of the problem.

Tue, 08/09/2011 - 21:19 | 1544856 Calmyourself
Calmyourself's picture

umm, Texas, SD

Tue, 08/09/2011 - 22:14 | 1544995 caerus
caerus's picture


Tue, 08/09/2011 - 22:43 | 1545045 Cathartes Aura
Cathartes Aura's picture

Mr. Pickens, that you?

A drought has drained water from Texas and much of the rest of the United States. That could make water an increasingly profitable commodity for those who hold the rights. According to his Web site, Pickens owns rights to more water than anyone else. "In general, there's a lot of it, it's just not in the right place," says Robert Stillwell, legal counsel for Mesa Water (and board member of the water supply district), which continues to acquire water rights in rural Texas. He dismisses questions about whether the water would be cost-competitive. For cities looking at their future water needs, he says, "cost becomes irrelevant." As far as Mesa's pipeline snaking across the Texas heartland, Stillwell insists that "it's going to happen, it's just a matter of when."

Read more: Beyond Wind Plan, Pickens Eyes Pipelines in Drought-Ridden U.S. - Popular Mechanics
Wed, 08/10/2011 - 02:33 | 1545335 Doyle Hargraves
Doyle Hargraves's picture

Google "Right to work States" and you will easily find out, they haven't left, they have tried to maintain profitability, you know the thing you need to keep the doors open and god forbid, maybe even grow a little?!

Tue, 08/09/2011 - 17:03 | 1543967 kaiserhoff
kaiserhoff's picture

It's life Jim, but not as we've known it.

Meredith Whitney for President/Comrad Leader/whatever.

Tue, 08/09/2011 - 17:05 | 1543979 Bastiat
Bastiat's picture

Yeah, cut the school year to 12 weeks a year: just don't cut any admin jobs or union janitors and don't even say the word: "benefits."  The Teachers Union owns Brown but they are up against it for real. Fire and Police own everyone -- even Whitman cut a deal with them during her campaign.  It won't be pretty.

Tue, 08/09/2011 - 19:36 | 1544588 karzai_luver
karzai_luver's picture

London calling my sweets and it's pissed.

What was the old saw???? Everything starts in Kali or something like that.....


good night.





Wed, 08/10/2011 - 02:59 | 1545356 Doyle Hargraves
Doyle Hargraves's picture

It will be very pretty from my rear view mirror!

Tue, 08/09/2011 - 17:06 | 1543986 JW n FL
JW n FL's picture

25% slide will get you QE-3!

That is a small price to pay for FREE MONEY!!

Thank God for the Money Hole!!

The Corporate Dollars Behind Congress' Push For A Huge Corporate Tax Holiday

This Girl is a Saint! God Bless Her!
Executive Director Sheila Krumholz.
PLEASE! Donate to Open Secrets! $10 bucks doesn’t hurt you and if enough of us donate it does help them! Open Secrets does help “We the People” Track these Lobby Whores who Control the Laws made in this Country!

Tue, 08/09/2011 - 17:06 | 1543987 pods
pods's picture

Can't they just have the BLS do their tax collections?  They will get whatever number they need.


Tue, 08/09/2011 - 17:11 | 1543996 JW n FL
Tue, 08/09/2011 - 17:11 | 1543999 snarkolepsy
snarkolepsy's picture

Well, it's even worse than that. Right? California took out all those anticipation revenue bridge loans just a couple of weeks ago. Due in Nov.

So really... everyone is on the hook.

Tue, 08/09/2011 - 17:11 | 1544000 dexter_morgan
dexter_morgan's picture

clueless Keynsians

Tue, 08/09/2011 - 18:25 | 1544303 JW n FL
JW n FL's picture

you mean democrats! its all their fault!

Wed, 08/10/2011 - 09:49 | 1545978 Iam_Silverman
Iam_Silverman's picture

"clueless Keynsians"

Kenyans, or Keynesians?  I suppose it doesn't matter.

Tue, 08/09/2011 - 17:12 | 1544006 chumbawamba
chumbawamba's picture

That's right.  Cuz I ain't fookin payin', California.

F U F T B!

I am Chumbawamba.

Tue, 08/09/2011 - 17:14 | 1544016 youngandhealthy
youngandhealthy's picture

Chumbawamba = Germany

Tue, 08/09/2011 - 17:38 | 1544118 magpie
magpie's picture

So Chumba ready for his ratings downgrade ?

Tue, 08/09/2011 - 17:49 | 1544162 Hephasteus
Hephasteus's picture

"That's right. Cuz I ain't fookin payin', California."

After a diebold voter booth was programmed to show full faith and credit in you. You go and stack dump all over it.

Tue, 08/09/2011 - 18:03 | 1544221 chumbawamba
chumbawamba's picture

Fuck yes.

I guess.

I have no idea what you mean.

Carry on.

- Chumblez.

Tue, 08/09/2011 - 23:07 | 1545088 Hephasteus
Hephasteus's picture

Hmm. Take a look.


And you wonder why everyone wants those things to use touch screens and everyone fights over the touch screen patent. ;)

Tue, 08/09/2011 - 17:14 | 1544015 Seasmoke
Seasmoke's picture

public employess (pigs) better make a run on the pension ponzi before its all gone !

Wed, 08/10/2011 - 00:21 | 1545212 DeadFred
DeadFred's picture

They are. I know so many people who are really too young to retire (50's) who are opting out early because they worry there won't be anything left for them when their time comes.

Wed, 08/10/2011 - 01:13 | 1545252 Things that go bump
Things that go bump's picture

I hope they can take it in a lump sum.

Tue, 08/09/2011 - 17:19 | 1544032 GCT
GCT's picture

California just another third world country.  Voted against moonbeam the first time and left the state and never looked back.  My borther and two sisters live there and I asked them why remain in Ca.  Their reply , "we love the beach".  Gotta love the idiots of the world.  Oh well better to let them stay there anyway.  Where I live we shoot bambi!

Tue, 08/09/2011 - 21:59 | 1544957 Sheriff Douchen...
Sheriff Douchenik from AZ's picture

+1, good call.

Wed, 08/10/2011 - 02:39 | 1545339 Doyle Hargraves
Doyle Hargraves's picture

"...we love the beach"., I love the beach, too. Especially ones that aren't polluted daily with raw sewage from that third world bastion, LA. That is why I am moving soon back to the coastal empire/low country. There are better beaches there (no sewage, still clean), and better living (at a lower price), with very few parasites. They may as well have said, we already got fucked up by the polluted beaches and are too brain damaged to go anywhere else.

Tue, 08/09/2011 - 17:21 | 1544050 electronpaul
electronpaul's picture

"Income taxes were up slightly, but sales and corporate collections lagged by a combined nearly $210 million. But the biggest drag was from the unidentified $4 billion that budget writers had banked on"

WTF does that mean? Hey CA is the biggest market in the US, extrapolate this income tax miss across all the states and compare that to the revenue estimates of the "debt ceiling" deal. UGGGGHHHH. 

Anybody want to start an over/under on when the new "ceiling" is breached? 1Q 2013? 4Q 2012?  



Tue, 08/09/2011 - 17:24 | 1544066 LawsofPhysics
LawsofPhysics's picture

fine with me.  The sooner the debt ceiling is reached, the sooner gold goes above $2,000 an ounce.

Tue, 08/09/2011 - 17:38 | 1544114 dexter_morgan
dexter_morgan's picture


Tue, 08/09/2011 - 17:22 | 1544055 electronpaul
electronpaul's picture

Ron Paul 2012...

Tue, 08/09/2011 - 17:23 | 1544060 vast-dom
vast-dom's picture

NYTimes commentator:


"For most of the commentators here that still believe there is any reason to differentiate between Democrats, Republicans & The Tea Party let me just state this now and get it out of the way: you are brainwashed sheeple.

There is only one party here in the US of A and it is the BANKSTER PARTY. And this party wants the $ as devalued as possible since over 60% of their profits come from overseas. And this party cares only about profits at the expense of the global populace. And this party will cover up their negative fundamentals at any cost possible, even if that means devaluing homes and allowing middle-class squatters to live in these toxic assets only to not show their books to the world.

So what are left with is a Zombie Industry that controls the planet with whichever party (it's binary and just as distracting as a football game and a beer and you do need beer) doing whatever. Bernank is a criminal. And we have something called Taxation Without Representation. Only it is much more insidious than that. Why? Because your taxes fund Zombie Bonuses for Toxic Work performed on Toxic Assets.

To say this is unsustainable and untenable is less an understatement and more of a glaring painfully obvious observation. Today we have a smoke and mirrors rally on some low-grade Fed manipulation. Does anyone think this dead-cat bounce is anything more than that? How many bounces does the rotten corpse yield is the only relevant question. Balance, sooner or later, will be restored -- just how much wreckage do we incur and how much rebuilding must be done is what our less-than-myopic non-leaders will never bother to ask."

Tue, 08/09/2011 - 17:21 | 1544064 navy62802
navy62802's picture

Obviously, they overtaxed the "job-creators," so everyone's salary fell ... resulting in lower tax revenue. Obviously.

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