Nope, no good news today (that you can believe at least). Yet another day of dismal data and more lies designed to make you think the recovery is here and there is no threat of a double dip in this recession. It is over, move along, nothing to see here.
Let's start with the most obvious and what everyone should have expected. State Tax Revenues Plummet By $87 Billion, Biggest Year Over Year Decline In History; Record State Tax Hikes In Progress. OK, so unemployment is at 17% (U-6 we count here on Shanky's blog not the U-3 number), what did you expect? "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." I have been reporting via Mish and other sources the blight facing the state and local governments. I hope you have been listening, cause this country is chock full of our own version of Greece but on steroids. The stress on state budgets is tremendous. Stay tuned for some real interesting actions as balanced budgets come due.
I hit on this briefly this morning University of California Campus Erupts In Riots; Student Loan Scam Drives Up Cost Of Education; Expect More Riots "Students at the University of California’s flagship Berkeley campus took to the streets on Friday night, vandalizing university buildings, burning trash cans and clashing with police in the latest expression of frustration over cuts to the educational budget in California." I know the budget cuts have our local college students in a minor tizzy, but nothing like the children at Berkley. A quick Google search yielded nothing, so I guess this is something the MSM is not going to let you in on.A quick read of Mish's post brings some good points to light. Mainly the fraud that potentially exists in the student loan arena. What's that Shanky? Fraud? More fraud? Yeah, it seems like the universities have a TBTF mentality. you see with the government backing every child that wants to go to school (does this sound familiar to another recent problem) the universities have loaned away the farm. Now with the government cutting back and with loan standards rising students are having fits. (where have I heard that story before?)
I liked this one from the Market Ticker - short and sweet - ADMISSION By FDIC: Massive Balance Sheet FRAUD Me thinks someone from the FDIC put something in an email they should not have, ""That’s the value the bank had them on their books on their year-end financials, but the true value is much less. It is similar to someone in Las Vegas saying that their house is worth $300,000 because that’s what they paid for it three years ago, but the reality is, if they had to sell it in today’s market, they’d only get $250,000 for it. The FDIC has to sell assets in today’s market." Remember Mark-to-market and the accounting fraud I keep beinging up and the insolvent banks? Yup, that's it!
Naked Capitalism has Banksters Win Again, Edition 1,477,536 a sad story about more reform failures. We all know that a serious lack of regulation (that is being kind) got us into this mess. well, now the banksters have it so good that they don't want nay regulation. It will only cause more problems in their eyes. Here you are seeing your spineless representation in Washington at their finest hour. Bowing to the blackmailing banks that hold us hostage. "Obama has not been well-advised. His so-called accomplishment — stabilizing the financial system — comes from throwing trillions of taxpayers’ dollars at financial firms. He has behaved like a Wall Street trader: spending other people’s money with no thought of consequences. Anyone can do that… Reform, not stimulus, is the solution. Only by limiting financial speculation can the foundations be laid for a healthy recovery, and to prevent another crisis."It is truly astounding when you read it every day. the problems are plain as the nose on your face, yet they pretend they can't fix things cause of systemic risk. I ask, systemic risk to whom, the banksters or the nation?
Washington's Blog has White Schools Bernanke on Basic Economics (after you dig around a few conspiracy laced post which are the best on the web). Look, I'm no economist, but the points Mr. White brings up are like econ 101 and these dips running the Fed don't even get those basic principles. The Fed is behind everything and they are the root of all evil in my book. At this point I am not sure if all of this was engineered or truly a dunb fuck moment of historic perspective. I'm leaning to engineered when you get quotes like this, "Should governments feel it necessary to take direct actions to alleviate debt burdens, it is crucial that they understand one thing beforehand. If asset prices are unrealistically high, they must fall. If savings rates are unrealistically low, they must rise. If debts cannot be serviced, they must be written off." Note the "debts must be written off" point.
You may have seen the "Invest In California" banner adds floating around on the internet. (Cough, cough, clear throat, giggle). Uh, OK, so why are they asking you and me ton invest in Cali? Bill Lockyer Goes Direct To Retail Investors With The "Terrific" Opportunity To Front Run Institutional Investors In Cali Bonds - Just Don't Do It - cause your state will need you soon enough."If anything, it underscores just how horrendous the fiscal situation in California is, and how anyone buying into this bond issue should be prepared that the next round just may not find enough greater fools to extend the perpetual refi Ponzi (forget about repayment at maturity)."
That is enough for today. No mention of the PIIGS or Dubai today, but that does not mean the problems have not gone away. I'm getting more worried everyday for each of us. It is piling up all around us and they are using smoke and mirrors to hide the truth. Sadly, when the first card fails, the whole house comes down - globally. The debt laden camel's back is bout to give way. Be prepared.