Saturday, November 13, 2010

Cub bailout? No, hell no, no!

Ricketts & Co. making play for taxpayer-funded renovations to Wrigley Field and surrounding area.
Cubs Executive Chairman Tom Ricketts tried Friday to calm the uproar. In several radio interviews, he said Cubs fans are on the hook, not the at-large taxpayer on the South Side, in Peoria or in Carbondale.
That's not quite true, is it Mr. Ricketts?
The bonds also would get a better credit rating with additional security, much like a co-signer on a loan. The Cubs' proposal calls for the bonds to be backed by a hotel tax that is used by the sports authority to repay debt for U.S. Cellular Field and Soldier Field.
And then there's this:
Ricketts argued that the city and county can't count on incremental revenue from the Wrigley amusement tax if the Cubs don't refurbish the 96-year-old ballpark. The growth in the amusement tax will primarily come from increasing ticket prices. Ricketts said it's easier to justify higher tickets prices over time in a renovated stadium.
Then refresh my memory - what was the justification for raising prices for the 2010 season?  The 2009 season?  Etc?

From Ticket News on the 2010 season:
Also raising prices by 10.1 percent this year, the Chicago Cubs take the title of the highest average ticket price in the league, at $52.56. The Boston Red Sox, which historically charged some of the highest ticket fees in the league, came in second this year at $52.32. The Yanks come in third at $51.83.
Interesting.  The Yankees are the 2009 champions, while the Red Sox won championships in 2007 and 2004.

I'm so flaming irritated by this naked grab for taxpayer money that I have heartburn.  How handy that slack-jawed State Sen. Cullerton is already prepped to introduce the legislation to authorize the Illinois Sports Facility Authority (ISFA) to issue bonds backed by city & county amusement tax revenues.  And that it was announced after the election.

With this state/county/city in a death spiral of bond rating downgrades, who in their right mind would buy those bonds?  Backed by amusement taxes in a depression no less!  (Oh sure, NBER said the recession ended summer of 2009.  Other than Washington, who pays attention to those idiots?)

And if I hear one more idiot talk about the benefit sports teams bring to the economy I may get violent.  Sports teams, professional and amateur, do not generate extra revenues in the metro area.  What they do is redirect discretionary spending away from other neighborhoods.  And in the Great Recession the discretionary spending is evaporating to nothing.

Benefits of pro sports on economy often overstated

Pro Sports Impact Closer To A Bunt Than A Homerun
(University of Washington)
To warm up his audience, [UW Professor] Beyers held a "pop" quiz. "I'm going to give you three different percentages for the economic impact of sports on the local economy, and you raise your hand for what you think is the right answer," he said.
"Ten percent." (A good number of hands rise.) "One percent." (A majority of hands are held high.) "One-tenth of one percent." (Hardly a hand in the air.)
"The correct answer is 1/10th of one percent, and even that is probably overstating it," Beyers told the crowd.
Well, we certainly can't let that information get in the way of a bond issue!

Thursday, September 30, 2010

I see your punk ass and I'm shooting it off

In today's Chicago Sun-Times they cover Margaret Matthews, 68 year old black woman, living in Chicago's South Shore neighborhood, finally had enough of the terrorizing and attacks and fired upon her attackers: teenage boys. And she nailed one of them in the shoulder.

From the Stella Foster column:
IT IS SO SAD THAT Margaret Matthews, a 68-year-old widow living alone in her South Side home, got so fed up with some little thugs in her neighborhood victimizing her that she pulled a gun, chased and shot a 12-year-old boy in the arm on Tuesday after she was hit in the thigh with a brick. The boy survived and has been charged with assault. She fortunately was not charged because she acted in self-defense.

A 12-year-old hurling a brick can be just as lethal as one thrown by a grownup. A 12-year-old with a gun can kill just like an adult. And it is time for parents and their rowdy offspring to be held more accountable for their actions.

Yeah, I said it!
From the Mary Mitchell column:
Fed-up woman realized cavalry wasn't coming

When people get fed up, they stop waiting for help to come. On Tuesday, one South Side senior had had enough. When two boys who allegedly broke her windows were brazen enough to come back and curse her out, Margaret Matthews shot one of them in the arm.

According to the woman's neighbor, Hilda Brunt, the boys, ages 12 and 13, had been tormenting the senior for a while.

And from the front page article (which strangely is very hard to find on the web site):
Support for senior woman who shot boy, 12

Margaret Matthews gave a simple reason why she shot a 12-year-old boy who threw rocks at her on her South Shore porch Tuesday: "I done had enough."

These kids are out of control --we all done had enough," Johnson [friend of Margaret Matthews] said Wednesday as neighbors overwhelmingly rallied in Matthews' support, dubbing her a "hero."

But Matthews, who has lived at the coach house in the 7600 block of South Cole for 30 years, won't be charged because she acted in self-defense, police say.

I think if Daley and the CPD had their druthers they would have preferred to press charges on Margaret Matthews, but the outcry on the elderly gentleman who protected himself against an invader earlier this year (shooting and killing the criminal) has put them back on their heels for now.

And the comments on the Sun-Times articles are awesome - the only people protesting Matthews' actions claim "it's never right to shoot a boy." Trolls and misguided idiots.

Oh, one other thing: I live in the same neighborhood as this woman, 5 blocks north of her. And almost everyone in this neighborhood is packing, legally or not.

One last thing: Mrs. Matthews lives in a section dubbed "Terror Town" which has the Chicago Police blue lights and no patrols.

No wonder Daley is getting out. Well, that and he probably can't hide Chicago's massive budget shortfall any longer.

Up the Republic!

Tuesday, August 03, 2010

Adventures of a Bible Transcriptionist, no. 37

Getting close to another election, so the talk of the Ten Commandments is ramping up again. I'm sure this has been done before, but can we get on tape people coming out of various houses of worship to recite the 10 Commandments? On to the adventure, this time Exodus.

God spake all these words (Exodus 20:19). And his secretary was a graduate of the King James Version. And the Secretary annoyeth God to no end.

In a nutshell, God got those stiff-necked people (his words) out of Egypt, and Egypt was plenty glad to see them go. Oh sure, we've already heard the Israelites' version.

After he got them into the desert, he had them just where he wanted them. Flatfooted and hotfooted.

God rattled off 17 statements in pretty quick fashion (King James Version School for Secretaries had a rudimentary form of shorthand, and it didn't mesh well with cuneiform/hieroglyphics). Not only was the secretary flustered, but the Israelites were thrown off their game too. So they tooketh Moses aside and said unto him, "Speak thou with us, and we will hear: but let not God speak with us, lest we die." And if you're wondering, yes, yes they were a bunch of drama queens.

So Moses went back to God, who had retired to a thick darkness. We call them taverns today. And lo and behold, God wasn't done talking. He had only gotten started. It was a long night for Moses.

At this point let me backtrack a little. In his first spouting off, God mentioned "Lord your God am a jealous God, visiting the iniquity of the fathers on the children to the third and the fourth generation of those who hate me, but showing steadfast love to thousands generations of those who love me and keep my commandments."

So say someone loves God (great!) and his thousands generations get steadfast love of God. But say someone in Generation Two hates God (got lots of acne in his teens - so much for the steadfast love) and God visited iniquity onto his descendants to the 3rd and 4th generations. But aren't they supposed to get the steadfast love, being originally covered in the thousands generations covenant? Ed. note: God kicked this to the boys over at Yale Law Review to ponder.

Exodus 21:12 He that smiteth a man so that he shall die, shall be put to death. Ed. note: Exception for war, death of any "outsiders," women (of course), and mean geezers (not including God, of course).
Exodus 21:27: And if he smite out his manservant's tooth, or his maidservant's tooth; he shall let him go free for his tooth's sake. Ed. note: For tooth's sake!

God goes on and on for some time. Ten Commandments - bah! It's more like the Law Bulletin.

The secretary recalls (Exodus 22:24) "
And my wrath shall wax hot, and I will kill you with the sword; and your wives shall be widows, and your children fatherless." Groucho was funnier.

Exodus 22:28
Thou shalt not revile the gods, nor curse the ruler of thy people. The secretary pressed him on this, "surely you mean 'god,' right God?" God get snappeth and barked a few verses later (23:13) "Make no mention of the name of other gods, neither let it be heard out of thy mouth." I think God's letting some of those other personalities seepeth through (again).

Secretary further offers, after a sympathetic colleague buys Secretary a beer that God didn't omit the liquor distribution racket (Exodus 22:29) " Thou shalt not delay to offer the first of thy ripe fruits, and of thy liquors." And he mentioned liquors TWICE. Oh, and he never buys a round - he doesn't have any pockets to carry his wallet. What a cheapskate.

Sadly, God is a lobbyist for Goldman Sachs (Exodus 23:3) "Neither shalt thou countenance a poor man in his cause."

And he was weirdly obsessed with unleavened bread (Exodus 23:15). Have you ever had that stuff? It's gross.

And then, Secretary confided, God had a little too much of the first liquors and barketh at Moses (Exodus 23:21) "Beware of him [i.e. angel] , and obey his voice, provoke him not; for he will not pardon your transgressions." So he's sending an emissary with a nice personality combination, hostile and intolerant."

But God's not just a speculator, he's a hedger too. (Exodus 23:28-30) And I will send hornets before thee, which shall drive out the Hivite, the Canaanite, and the Hittite, from before thee. And I will send hornets before thee, which shall drive out the Hivite, the Canaanite, and the Hittite, from before thee. I will not drive them out from before thee in one year; lest the land become desolate, and the beast of the field multiply against thee. By little and little I will drive them out from before thee, until thou be increased, and inherit the land.
Ed. note: We'll let the whole hornet thing pass without comment.

Secretary also mentions, in keeping with God's other habits, that he can go on quite a bender. And the hangover that follows is of epic proportions. (Exodus 24:16) And the glory of the LORD abode upon mount Sinai, and the cloud covered it six days: and the seventh day he called unto Moses out of the midst of the cloud.
Ed. note: "Glory" is code for "hangover." Note it took six days to work off that hangover.

In Exodus 26, God gets all Martha-Stewarty, getting into way too much detail on what wood the ark should be, and the curtains. BORING. Although it is interesting to see that God likes gold as much as we do.

The Secretary was asked about Exodus 26: And thou shalt put the mercy seat upon the ark of the testimony in the most holy place. Secretary confirmed it was frightening to ask.

For chapter 28, God was out of town so Aaron provided God's dictation. Secretary found this odd, but took it anyway. Strangely, the whole thing revolves around garments "made for beauty and glory" of the priests. Although they do have to wear a bell when Aaron goes into the holy place or God will have to kill him.
Ed. note: That does have the ring of a God commandment.

After yakking for several chapters, God finally finished the tablets (Exodus 31:18) written by the finger of God. So, Secretary, no credit whatsoever for the endless dictation? Secretary smirks and says "Oh, I got my glory a little later."

Secretary continues "Chapter 32 was the 'Aaron' chapter - not dictated by Aaron though. He went crazy with desert fever and made golden calves. And God was not amused. He told Moses (Exodus 32:9-10) ' I have seen this people, and, behold, it is a stiffnecked people: Now therefore let me alone, that my wrath may wax hot against them, and that I may consume them.'" Moses talked him out of it, by pointing out all the work he had already done just getting this stiffnecked people out of Egypt and to this point.

But then, Secretary says, chapter 33 got a little weird. A little weird, we exclaim! Secretary recounts (Exodus 33:11) that God spake unto Moses face to face. Naturally, we have to take Moses' word for it because a cloudy pillar blocked the entrance to the tent. It's followed up with (Exodus 33:20) "Thou canst not see my face for there shall be no man see me, and live." Secretary comments "I think both God and Moses were dipping into the liquor." But, Secretary says, "I promised you it would get weirder and it does. (Exodus 33:22-23)
"And it shall come to pass, while my glory passeth by, that I will put thee in a clift of the rock, and will cover thee with my hand while I pass by: And I will take away mine hand, and thou shalt see my back parts: but my face shall not be seen."
Ed. note: So God mooned Moses. And Secretary was there to see it all.

Tuesday, June 22, 2010

Beau Geste in the World Cup

Today's FT revealed I am way behind on salacious World Cup stories. Credit Agricole, Quick (a burger chain), and Pringles have all pulled advertising because of dissension on the team, including a strike by the French players. (Insert your own joke here.)

But as funny as that is (and it is), here's what I took away from it: advertisers are not only willing but anxious to find a reason to pull advertising on sports. The economy is that bad that even sinking money into our modern day opiate isn't getting it done.

Crédit Agricole shows French World Cup team the red card

By Roger Blitz and Richard Lapper in Bloemfontein and,Peggy Hollinger in Paris

Published: June 22 2010 03:00 | Last updated: June 22 2010 03:00

France's World Cup campaign, crippled by dire performances on the pitch, internal strife and a players' strike, went from bad to worse yesterday when Crédit Agricole pulled an advertising campaign and sponsors demanded action by the country's football authorities.


The French bank said it had stopped the advertising campaign - due to run until June 25 - early "in view of the current controversy surrounding the French national team".


The team's corporate sponsors have held conference calls to voice their anger at the players' refusal to train.

One person who took part in the calls said that the sponsors believed the situation was "unacceptable".

France are on the verge of elimination from the tournament, their 2-0 defeat to Mexico on Friday forcing tension between management and players into the open. The French play South Africa in their final group game tonight.


The crisis and the behaviour of the national team has triggered an avalanche of public criticism in France. President Nicolas Sarkozy has demanded representatives of the players and the football federation meet with sports minister Roselyne Bachelot to restore calm.


It has highlighted, too, the sometimes fragile relationship between teams, players and their sponsors - graphically illustrated in the past year by sponsors deserting US golfer Tiger Woods over revelations about his private life.


The team's management sent home striker Nicolas Anelka for verbally abusing coach Raymond Domenech during half-time in the Mexico game, a move that led to the team's refusal to train on Sunday in protest. Jean-Louis Valentin resigned as team director in disgust at the players' behaviour.


Quick, the French burger chain, and Pringles the crisp brand owned by Procter & Gamble, have also pulled ad campaigns involving Mr Anelka.


The French debacle has led to sponsors working collectively to demand immediate action by the French Football Federation. Sponsorship and TV rights of the French national team are worth €70m, according to Les Echos. The team sponsors are retailer Carrefour, utility provider GDF Suez, Crédit Agricole, SFR, the telecoms company, and sports goods maker Adidas.

Sunday, June 20, 2010

Let's talk geology of the Deepwater Horizon disaster

We've given it 2 months, now let's talk about the geology of this oil spill. Courtesy of the George Washington blog, reposted on Zero Hedge:

There are several topographical maps in the post, making the point that the Deepwater Horizon well is in a canyon. On a slope in a canyon, to be more precise.

And the area is tectonically active.

And landslides are a real risk.

Per Offshore Magazine, on 4/21/2010:
ZUG, Switzerland -- The semisubmersible drilling rig Deepwater Horizon has reported a fire onboard, says Transocean Ltd. The rig is in the Gulf of Mexico Mississippi Canyon block 252, 41 mi (66 km) offshore Louisiana.

Transocean reports its Emergency and Family Response teams, the US Coast Guard, and oeprator BP Exploration & Production Inc. are responding. The reports says "a substantial majority of the 126 member crew is safe but some crew members remain unaccounted for at this time."


Offshore has a running column on the Deepwater disaster: The 6/21/2010 covers efforts to boost recovery of escaping oil.

Wednesday, May 12, 2010

Sinkhole terrorizes Montreal




From the Montreal Gazette:

On Monday night a huge sinkhole opened up and a family home sank into it, in St. Jude, about 77 kilometres northeast of Montreal, and north of St. Hyacinthe. Five nearby homes have been evacuated. All four members of the Préfontaine family were confirmed dead around 8:30 p.m. on Tuesday evening.
You see that little blue thing? That was a two-story house. There are more pictures at the link.

Sunday, April 18, 2010

Moving on - Portugal? Spain? France?(!)

Baseline Scenario makes the argument that Portugal is the next target of CDS speculators, and while reading the article made me think of this line:

Then there was Portugal, half-senile and three-quarters bankrupt, hoarding her ancient possessions in Africa[.]

It's from "Scramble for Africa" (Thomas Parkenham). I've read it multiple times - great stuff. What was true in the 19th century (and through to WWI), true today.

Back to Baseline Scenario:
To resolve its problems, Portugal needs major fiscal tightening. For example, just to keep its debt stock constant and pay annual interest on debt at an optimistic 5% interest rate, the country would need to run a 5.4% of GDP primary surplus by 2012. With a 5.2% GDP planned primary deficit this year, they need roughly 10% of GDP in fiscal tightening. It is nearly impossible to do this in a fixed exchange rate regime – i.e., the eurozone – without massive unemployment.

I'm leaning towards the ZH position, that France is the bigger target, because they're literally the bigger target:
CDS traders are now focusing their attention on the one country which has so far slipped under everyone's radar, yet which we disclosed is more on the hook in terms of Southern European exposure than even Germany: France, with $781 billion in total claims. Should Greece topple the PIIGS dominoes, France will implode. And this is precisely what CDS traders are betting on now, taking advantage of absurdly tight France CDS levels.


And as for you, Angela Merkel - who exactly is going to be left standing to be on the receiving end of your export economy model? Take your sanctimonious prattle and cram it down your throat.

Sunday, March 21, 2010

Pres. Obama: The smoother, smarter version of Bush Jr

I had hoped Obama wouldn't confirm my suspicions. And he has, in spades. (Too soon to pun? Okay.)

From Firedoglake:

"Edward Horgan, a well-known Irish activist and former Irish Defense Force officer, has had his 10-year, multiple-entry U.S. visa revoked without explanation. Horgan and others believe it is because of his principled stand against the U.S. use of renditions, and in particular, the use of Shannon Airport in western Ireland as a stopover for U.S. rendition flights. The Obama administration should be ashamed for its behavior in keeping Mr. Horgan from entering this country."

Obama's State Dept. pulled it on St. Patrick's Day. Those f*ckers have a sense of humor, don't they?

Thursday, March 11, 2010

Today's word is COLORABLE

Here's a handy little word: colorable.

According to Webster's:

–adjective
1. capable of being colored; 2. seemingly valid, true, or genuine; plausible; 3.
pretended; deceptive

Origin:
1400–50; late ME

Example of colorable:

The Examiner concludes that colorable claims of breach of fiduciary duty exist against Richard Fuld, Chris O’Meara, Erin Callan, and Ian Lowitt, and that a colorable claim of professional malpractice exists against Ernst & Young.

Thursday, March 04, 2010

Goldman Sachs has feelings too

GS's 10-K filing on 3/01/2010 below, with clarifying commentary thrown in for free (just doing God's work here):

Substantial legal liability or a significant regulatory action against us, or adverse publicity [talking about you, Zero Hedge], governmental scrutiny or legal and enforcement proceedings regardless of the ultimate outcome [Regardless of outcome - so don't inititate in the first place, or else], could have material adverse financial effects, cause significant reputational harm to us or adversely impact the morale and performance of our employees [and we can't stress enough, all of whom are doing God's work, not like those heathens at CME Group], which in turn could seriously harm our businesses and results of operations [We had 131 $100mln days in 2009, and we're shooting for 132 days in 2010]. We face significant legal risks in our businesses, and the volume of claims and amount of damages and penalties claimed in litigation and regulatory proceedings against financial institutions remain high. Our experience has been that legal claims by customers and clients increase in a market downturn [Which is odd since we make even more money in the downturns] and that employment-related claims increase in periods when we have reduced the total number of employees [like how we said layoffs without saying layoffs?]. For a discussion of how we account for our legal and regulatory exposures, see “— Use of Estimates” below. ["Use of Estimates" is code for "go f*ck yourself."]

64

Thursday, February 25, 2010

Whatever you do, don't mention the war. Greece said what?!

From the UK Telegraph:
Theodoros Pangalos, deputy prime minister, said Germany had no right to reproach Greece for anything after it devastated the country under the Nazi occupation, which left 300,000 dead. "They took away the gold that was in the Bank of Greece, and they never gave it back. They shouldn't complain so much about stealing and not being very specific about economic dealings," he told the BBC.


Friday, February 19, 2010

If the duck doesn't have money and doesn't pay its bills, it's Illinois

The Chicago Sun-Times has an article in the Friday (2/19/2010) paper detailing how the State of Illinois has failed to deliver $250 million owed to the RTA (Regional Transportation Authority).

[Executive Director] Schlickman said the state is regularly late with its payments to the RTA for state-funded programs, but now the RTA is running low on cash. The agency has just $90 million in cash on hand, which will help cover operating costs and debt payments through the end of May.

"After May, the debt trustees* will start intercepting our funds," Schlickman said. "Come this summer, we may be forced to ask the service boards to adjust their budgets accordingly."

Included in the print edition but not the online is an insert titled "Where's the money?" (page 18).
State is $735 million behind on payments to public universities ($475 million to University of Illinois alone).
Has paid one-third of $15 million due to library systems.
State owes $564 million to public schools.

It would be helpful if the press called it like it was - the state is bankrupt. Nomina Rutrum Rutrum

*I don't know what "debt trustees" are, but I find it intriguing.

Saturday, February 06, 2010

Nominated for dumbest state: Arizona

Mesa AZ, anxious to keep the Chicago Cubs from fleeing to the Grapefruit League in Florida, promised them a new park.

A small hurdle: Arizona, and every municipality in it, is the fiscal equivalent of a SuperFund site.

So how to pay for this $83 million baseball park?

A surtax on Cactus League tickets, of course.

Wholly unexpected in Phoenix was the reaction of the other teams in the Cactus League - such as the Chicago White Sox. Their position, to borrow from Professor Quincy Wagstaff: whatever it is, I'm against it.

Thursday, January 28, 2010

Road to Morocco

If trouble comes looking for me I'll be awfully hard to find.

Monday, January 18, 2010

Illinois is flat broke busted

From the Crain's Chicago Business article:

"The crisis will come when you see state institutions shutting down because they can't pay their employees," says David Merriman, head of the economics department at the University of Illinois at Chicago.
A record $5.1 billion in state bills was past due at year end, almost doubling to 92 days from 48 days a year earlier the average amount of time it takes the state to pay vendors such as doctors, hospitals, non-profit service providers and other contractors.
State tax receipts from July through December last year were running more than $1 billion behind 2008, including a $460-million plunge in sales taxes and a $349-million drop in personal income taxes.
While California has an even bigger budget hole to fill, Illinois ranks dead last among the states in terms of negative net worth compared with total expenditures.
The sharp rise in pension payments is the biggest factor pushing Illinois toward what a legislative task force last November (2009) called a 'tipping point' beyond which it will be impossible to reverse the fiscal slide into bankruptcy.


And if you're wondering, while there is no legal provision for states to file bankruptcy, they can and have defaulted on debts. Arkansas did during the Great Depression. In the 1840s nine states defaulted on debts. Four completely or in part repudiated their debts. Two, Maryland and Pennsylvania, were able to pay back debt & interest after enacting property taxes. (New taxes - sounds familiar.) The other states already had property taxes which had been raised "(also sounds familiar) and thus resorted to walking away.

Sunday, January 10, 2010

Pending changes to money markets, 401k, and IRAs

With an eye to the lengthy post, I'm presenting the summary first: the Federal Government, in a joint effort by the Treasury Dept & Labor Dept, is proposing to permit freezing redemptions of money markets, 401ks, and IRA accounts - the latter two by converting them to annuities.

What this means to you:
A) no option to redeem your IRA/401k account (I believe the current penalty is 10% plus income tax paid)
B) forced conversion to Treasury bonds - which are at historically low yields (the 30yr is 4.375%)
C) the US Treasury issued $1.2 trillion in bonds in 2009 - of which the Chinese only bought $200 billion and other foreign buying was less than that. This means nobody is buying our crap paper but we have to issue even more than $1.2 trillion in 2010 - somebody's got to buy that stuff. Oh, and in December 2009 Moody's put the US on a watch list for possible downgrades. When an issuer gets downgraded, they have to raise rates to attract buyers - unless they have a captive audience.

Bloomberg: Retiree Annuities May Be Promoted by Obama Aides
The U.S. Treasury and Labor Departments will ask for public comment as soon as next week on ways to promote the conversion of 401(k) savings and Individual Retirement Accounts into annuities or other steady payment streams[.]

[Ed. note: It's also a very handy way to drum up demand for the flagging US Treasury market. And the ensuing equity market crash (which will happen when all those 401k & IRA income streams get diverted from the equity market to the bond market) will drive even more investors to Treasuries.]

Zero Hedge - This Is The Government: Your Legal Right To Redeem Your Money Market Account Has Been Denied

Money Market funds, which account for nearly 40% of all investment company assets. The next time there is a market crash, and you try to withdraw what you thought was "absolutely" safe money, a back office person will get back to you saying, "Sorry - your money is now frozen. Bank runs have become illegal." This is precisely the regulation now proposed by the administration. In essence, the entire US capital market is now a hedge fund[.]

And Zero Hedge's conclusion:

What we will know, is that now i) the government is all too aware that the market has become one huge ponzi, and that all investment vehicles, even the safest ones, are subject to bank runs, and ii) that said bank runs, will occur. It is only a matter of time. And just as the president told everyone directly to buy the market on March 3, so the SEC, the Group of 30, and Barney Frank are telling us all, much less directly, to get the hell out of Dodge.

Jesse's Cafe Americain: Obama Adminstration Wants To Annuitize 401k's and IRA's - Mandatory "R Bonds"
My model for thinking about this annuitization is that the government wishes to appropriate your savings for a 2.0% return, ex fees and mispriced risk and inflation, as a source of funding for the bailouts of an oversized and insolvent FIRE* sector (like AIG) and the imploding pretensions of a global financial elite.

Good luck.

*FIRE: Finance, Insurance, Real Estate

Wednesday, January 06, 2010

More Good News

You'll see news outlets furiously try to persuade us that consumer spending was up for Xmas '09 over Xmas '08, but you can't argue with sales tax receipts.

And they were down 7.7% Dec '09 from Dec '08.

"Month to date tax receipts are now in for the entire month of December. They’re down 7.7% from December 2008, which is exactly the same rate of decline as November’s. We know that the TBAC and Treasury officials were not anticipating that in their debt sales forecast for the first quarter. They had assumed that a recovery was taking root and would continue to do so. That spells trouble for both bonds and stocks."

Contrast that with the Pollyanna NY Times:

"Despite a weak start to the holiday shopping season and snowstorms on historically big spending days, the nation’s retailers managed to have a better Christmas than in 2008, according to the latest data.

Mr. McNamara*, however, estimated that the retailing industry turned in a 1.7 percent sales increase in November and December compared with the period a year earlier."

Economists who actually saw the real estate bubble and coming crash have worse news for us:

"The recession is not over," said Michael Intriligator, professor of economics at the University of California, Los Angeles. He predicted economic output would not return to pre-crisis levels until 2013, while the job market would not fully recover until 2016.

[Joseph] Stiglitz^ said, what has so far emerged in terms of regulatory reform proposals is far too meek to have any effects. "The regulatory reforms on the table are totally inadequate," he said.

*Vice president for research and analysis at SpendingPulse, an information service of MasterCard Advisors.
^Joe Stiglitz was an economic advisor to Pres. Obama during his presidential campaign.