[lowrentyieldmakessense(honest!)]

recovery

its global Gordon

link

Quote

The Center on Budget and Policy Priorities has released a report "State Tax Changes in Response to the Recession" in which the center notes that "national recession has had such a devastating effect on state finances that states took in $87 billion less in tax revenue from October 2008 through September 2009 than they collected in the previous 12 months. This 11 percent decline, the steepest on record, resulted from the impact on tax collections of lost jobs, reduced wages, and lowered economic activity." And here we are, missing the forest for the Greek tree, and discussing evil CDS speculators' role in Greece barely able to make a €5 billion bond auction, when we should be all over the evil Municipal CDS speculators wreaking havoc in our own back yard.

And it actually gets worse: as we have pointed out, states are now running on fiscal fumes, as record unemployment insurance claims bleed the vast majority of state not only dry, but well in credit to the Federal government. "At the same time, the recession has driven up the number of people needing various state services. This, along with the requirement that states have balanced budgets, has increased the pressure on states to deal with the unprecedented revenue shortfalls in a variety of ways. Nearly all states have cut spending. In addition, most have opted for a balanced approach that includes revenue."

So while Obama is about to break all campaign promises about taxing everyone, let alone those who make under $250,000, individual states have already raised taxes by substantial amounts in an unprecedentedly short period of time.

[lowrentyieldmakessense(honest!)]

Quote

Just in case it is not obvious to the ambulance chasers, here is tomorrow's MSM headline bold, ALL CAPS glory: OH NO, MUNICIPAL CDS IS SURGING! KILL THE CDS TRADERS, KILL THEM ALL!!!! IT IS NOT THE STATES' FAULT THEY ARE ALL BANKRUPT, IT IS THOSE SPLIT-TONGUED, SULFUR-SMELLING SPECULATORS WHO ARE WREAKING MARKET HAVOC!!!

Here's an idea - why not just sell MCDX? If you think the market is so mispriced, just take the other side of the trade.

Ugh, logic.

yeah why dont those European politiians take the other side of the trade (with their own money of course)

[interestrateripoff]

For me one of the most important economic indicators is tax revenues, if they are collapsing we are in deep trouble.

At some point govt expenditure is going to have to be cut, either by job losses or wage cuts.

[lowrentyieldmakessense(honest!)]

interestrateripoff, on 10 March 2010 - 08:35 PM, said:

For me one of the most important economic indicators is tax revenues, if they are collapsing we are in deep trouble.

At some point govt expenditure is going to have to be cut, either by job losses or wage cuts.

that will be a first

cant they get growth to sort out the cuts needed

[lowrentyieldmakessense(honest!)]

only slighlty related

but had to post somewhere

[Errol]

Good to see such clear evidence of recovery.

[barry]

lowrentyieldmakessense(honest!), on 10 March 2010 - 09:59 PM, said:

only slighlty related

but had to post somewhere

The US needs an universal health care system.

They can't afford the private one.

Where I live it's $3000 per head (less than half of the $7,000 per head in the states) and it's a far better system.

This post has been edited by barry: 11 March 2010 - 08:50 AM

[What's'isname]

Most taxes are collected retrospectively so are a lagging indicator. Tax revenue now is a guide to how bad things were in 2008/2009. It's possible things are actually worse now and this will be reflected in the 2009/2010 tax take.

[Bloo Loo]

redalert, on 11 March 2010 - 08:51 AM, said:

Most taxes are collected retrospectively so are a lagging indicator. Tax revenue now is a guide to how bad things were in 2008/2009. It's possible things are actually worse now and this will be reflected in the 2009/2010 tax take.

Its always a philip to my soul to read your posts...

[DabHand]

barry, on 11 March 2010 - 08:49 AM, said:

The US needs an universal health care system.

They can't afford the private one.

Where I live it's $3000 per head (less than half of the $7,000 per head in the states) and it's a far better system.

That may well be but the current proposal is effectively compulsory insurance with no government option to avoid gougers. I don't see any of this improving the cost aspect, which l agree is out of control in the US.

[Rare Bear]

DabHand, on 11 March 2010 - 11:27 AM, said:

That may well be but the current proposal is effectively compulsory insurance with no government option to avoid gougers. I don't see any of this improving the cost aspect, which l agree is out of control in the US.

Although I reckon that the cost in the US is highly loaded due to their tendency to sue the medical profession at the drop of a hat.

[HPC001]

Rare Bear, on 11 March 2010 - 01:51 PM, said:

Although I reckon that the cost in the US is highly loaded due to their tendency to sue the medical profession at the drop of a hat.

It's also heavily biased towards certain solutions due to the interference by the pharmaceutical industry...

[interestrateripoff]

redalert, on 11 March 2010 - 08:51 AM, said:

Most taxes are collected retrospectively so are a lagging indicator. Tax revenue now is a guide to how bad things were in 2008/2009. It's possible things are actually worse now and this will be reflected in the 2009/2010 tax take.

Surely sales taxes are a good indication of the condition of the economy?

[lowrentyieldmakessense(honest!)]

recovery


http://www.nytimes.c...0states.html?hp

Quote

PAYBACK TIME
State Debt Woes Grow Too Big to Camouflage
Monday, 29 March 2010

California, New York and other states are showing many of the same signs of debt overload that recently took Greece to the brink — budgets that will not balance, accounting that masks debt, the use of derivatives to plug holes, and armies of retired public workers who are counting on benefits that are proving harder and harder to pay.
...
New Hampshire was recently ordered by its State Supreme Court to put back $110 million that it took from a medical malpractice insurance pool to balance its budget. Colorado tried, so far unsuccessfully, to grab a $500 million surplus from Pinnacol Assurance, a state workers’ compensation insurer that was privatized in 2002.
...
Connecticut has tried to issue its own accounting rules[ laugh.gif] . Hawaii has inaugurated a four-day school week. California accelerated its corporate income tax this year, making companies pay 70 percent of their 2010 taxes by June 15. And many states have balanced their budgets with federal health care dollars that Congress has not yet appropriated.
...
The states can also take refuge in America’s federalist system. Thus, if California were to get into hot water, it could seek assistance in Washington, and probably come away with some funds. Already, the federal government is spending hundreds of millions helping the states issue their bonds.
...
So far, the bond markets have been unfazed [er, see red bit above].
...
...the derivatives popular with states and cities have been interest-rate swaps, contracts to hedge against changing rates.

The states issued variable-rate bonds and used the swaps in an attempt to lock in the low rates associated with variable-rate debt. The swaps would indeed have saved money had interest rates gone up. But to get this protection, the states had to agree to pay extra if interest rates went down. And in the years since these swaps came into vogue, interest rates have mostly fallen.

Swaps were often pitched to governments with some form of upfront cash payment — perhaps an amount just big enough to close a budget deficit. That gave the illusion that the house was in order, but in fact, such deals just added hidden debt, which has to be paid back over the life of the swaps, often 30 years.
...
Joshua Rauh, an economist at Northwestern University, and Robert Novy-Marx of the University of Chicago, recently recalculated the value of the 50 states’ pension obligations the way the bond markets value debt. They put the number at $5.17 trillion.

After the $1.94 trillion set aside in state pension funds was subtracted, there was a gap of $3.23 trillion — more than three times the amount the states owe their bondholders.
...
With bond payments and pension contributions consuming big chunks of state budgets, Mr. Rauh said, some states were already falling behind on unsecured debts, like bills from vendors. “Those are debts, too,” he said.

In Illinois, the state comptroller recently said the state was nearly $9 billion behind on its bills to vendors, which he called an “ongoing fiscal disaster.”

http://www.greenener...ndpost&p=161106

[ken_ichikawa]

redalert, on 11 March 2010 - 09:51 AM, said:

Most taxes are collected retrospectively so are a lagging indicator. Tax revenue now is a guide to how bad things were in 2008/2009. It's possible things are actually worse now and this will be reflected in the 2009/2010 tax take.

Not quite PAYE and the fact that most accountants will phone in to reduce payments on account well in advance of the collection date for SA types you can estimate how much you will take quite accurately.