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(CNBC)   That Meredith Whitney chick might have been right after all. Muni-debt market on the verge of implosion   (cnbc.com) divider line 25
    More: Obvious, Meredith Whitney, muni, bond market, municipal bonds  
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2486 clicks; posted to Business » on 12 Jul 2012 at 9:36 AM (2 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-07-12 09:44:04 AM  
This country has a revenue problem.

Taxes on the wealthy are too low.

/yes they are
//YES, THEY ARE
 
2012-07-12 09:55:36 AM  
The government is corrupt and wastes money.

Taxes are too high for everyone.

/yes the are
//YES, THEY ARE
 
2012-07-12 10:01:29 AM  
FTFA: "Whitney told CNBC as recently as March that a "tidal wave" of defaults looms."

I don't know about the rest of the country, but I was listening to NPR while driving home last night, and they were discussing rumors that nearly a score of California cities may declare Chapter 9 in the next year. They only have two primary means of income: sales taxes and property taxes, and both have declined steeply in the past 5 years.

Short of bankruptcy the California Supreme Court has ruled that there is no way to get out of current and retired employee contracts. Local governments can't unilaterally raise taxes or start new ones, so when insolvency looms, they really have no choice.

Maybe with more Chap 9's unions will see the writing on the wall and start showing some flexibility. Bond holders already are, but so far unions are digging their heels in, only to lose big-time in bankruptcy court. Time will tell.
 
2012-07-12 10:10:14 AM  

StoneColdAtheist: FTFA: "Whitney told CNBC as recently as March that a "tidal wave" of defaults looms."

I don't know about the rest of the country, but I was listening to NPR while driving home last night, and they were discussing rumors that nearly a score of California cities may declare Chapter 9 in the next year. They only have two primary means of income: sales taxes and property taxes, and both have declined steeply in the past 5 years.

Short of bankruptcy the California Supreme Court has ruled that there is no way to get out of current and retired employee contracts. Local governments can't unilaterally raise taxes or start new ones, so when insolvency looms, they really have no choice.

Maybe with more Chap 9's unions will see the writing on the wall and start showing some flexibility. Bond holders already are, but so far unions are digging their heels in, only to lose big-time in bankruptcy court. Time will tell.


The case in Stockton and San bernadino is that the municipalities, I believe, are choosing to default rather than cut services further.

This might make sense for individual cities, but collectively it's bad for the muni market. Investors had believed default to be an extremely unappealing option. The more municipalities electively choosing this option before exhausting all cost cutting/revenue raising options the more spooked muni investors will become, raising rates for everybody.

Right now muni rates are very low because investors are starved of investment opportunities, so it's not an immediate problem, but over the long term a perceived increase in credit risk will raise borrowing costs for state and municipalities.
 
2012-07-12 10:26:43 AM  

Eapoe6: Taxes are too high for everyone.

/yes the are
//YES, THEY ARE


You are very not correct, unless you think taxes have been too high for the last 30 years. If you do think that, then we must disagree.

factcheck.org
 
2012-07-12 10:42:00 AM  
Whatever. I still can't believe they kept her show over Community.
 
2012-07-12 11:20:57 AM  

midigod: Eapoe6: Taxes are too high for everyone.

/yes the are
//YES, THEY ARE

You are very not correct, unless you think taxes have been too high for the last 30 years. If you do think that, then we must disagree.

[factcheck.org image 482x335]


Nice chart. No one can dispute a chart from the winners over at the Annenberg Public Policy Center. Those guys are so reputable and impartial. What is a thinking man to do when faced with that level of un-disputable authority?

Laugh at it and repeat my point.

The government is corrupt and wastes public funds and taxes are too high for everyone one. From the the 1913 invention of the IRS to this very day, taxes are too high for everyone.
 
2012-07-12 11:28:19 AM  
Sold my muni fund a the beginning of the year for a pretty slick profit.

/CSB
 
2012-07-12 11:36:17 AM  
Oh, I wonder why muni debt is on the verge of implosion? Maybe because Wall Street rigged the process and cost them millions of dollars? (LGT: Matt Taibbi in RS from a few weeks back)
 
2012-07-12 12:28:56 PM  

Eapoe6: From the the 1913 invention of the IRS to this very day, taxes are too high for everyone.


You sound irrational. But please, carry on.
 
2012-07-12 12:48:53 PM  
Mr. Meredith Whitney:

1.bp.blogspot.com
 
2012-07-12 01:25:39 PM  
1. Create long term obligations in exchange for lessened immediate benefits with models based on certain population and taxation levels.

2. Depopulate cities and increase sprawl via personal transportation and unsustainable policies / cultural ideals

3. Invest in inaccurately rated investments with promised safety and high returns to deal with 2 and satisfy the needs of 1.

4. Cut state revenue sharing with local municipalities due to economic downturn coupled with 2.

5. Borrow from interests that sold 3 to deal with 2 and 4.

5. Blame borrowers, eliminate pensions and democracy to make counter-party to 5 happy; encourage more 3.
 
2012-07-12 03:15:45 PM  
RIP Meredith Baxter Birney.jpg
 
2012-07-12 04:09:10 PM  

phyrkrakr: Oh, I wonder why muni debt is on the verge of implosion? Maybe because Wall Street rigged the process and cost them millions of dollars? (LGT: Matt Taibbi in RS from a few weeks back)


Yeah, that's it. Not promising generous benefits and services without being willing to raise taxes to pay for them. It's all wall street's fault.
 
2012-07-12 04:19:20 PM  
midigod


Eapoe6: Taxes are too high for everyone.

/yes the are
//YES, THEY ARE

You are very not correct, unless you think taxes have been too high for the last 30 years. If you do think that, then we must disagree.



When you have 14% effective unemployment, 1 in 16 workers on disability and 51% of the workforce paying no FIT, yeah I can see how the average would decrease.
 
2012-07-12 05:16:08 PM  
SacriliciousBeerSwiller

Abortions for all!

Booo!

Eapoe6

Abortions for some!

Yayyy!
 
2012-07-12 06:12:54 PM  

Debeo Summa Credo: StoneColdAtheist: FTFA: "Whitney told CNBC as recently as March that a "tidal wave" of defaults looms."

I don't know about the rest of the country, but I was listening to NPR while driving home last night, and they were discussing rumors that nearly a score of California cities may declare Chapter 9 in the next year. They only have two primary means of income: sales taxes and property taxes, and both have declined steeply in the past 5 years.

Short of bankruptcy the California Supreme Court has ruled that there is no way to get out of current and retired employee contracts. Local governments can't unilaterally raise taxes or start new ones, so when insolvency looms, they really have no choice.

Maybe with more Chap 9's unions will see the writing on the wall and start showing some flexibility. Bond holders already are, but so far unions are digging their heels in, only to lose big-time in bankruptcy court. Time will tell.

The case in Stockton and San bernadino is that the municipalities, I believe, are choosing to default rather than cut services further.

This might make sense for individual cities, but collectively it's bad for the muni market. Investors had believed default to be an extremely unappealing option. The more municipalities electively choosing this option before exhausting all cost cutting/revenue raising options the more spooked muni investors will become, raising rates for everybody.


When your pension costs leave you the options of A) going bankrupt today, or B) going bankrupt tomorrow, what's the point in waiting? The cost of providing services isn't what's killing them... it's the cost of providing pensions, and the only way to reduce those costs is thru bankruptcy.
 
2012-07-12 06:14:50 PM  

midigod: Eapoe6: Taxes are too high for everyone.

/yes the are
//YES, THEY ARE

You are very not correct, unless you think taxes have been too high for the last 30 years. If you do think that, then we must disagree.

[factcheck.org image 482x335]


Run that graph back to the early 1800s and you'll see the problem: taxes have been too high for too long.
 
2012-07-12 06:41:11 PM  
doesn't anyone here remember the municipal bond market fraud that the banks have been doing and caught doing and confessed to doing and are bing tried for doing?

http://www.investmentfraudlawyerblog.com/2009/07/regulators_investiga t e_fraud_i.html

from small towns to large states, banks screwed them out of years of projected income. Not to mention the budget shortfalls due to forclosures. Don't even get me started on Tax dimminution (I'm from the Caymans so don't argue with me on this, it used to be my bread and butter till the OBAMA admin killed it).

Your country got Farked by it's large investment groups. I laugh at you while you sit here and blame it on the sitting admin who's trying to help you fools.
 
2012-07-12 06:41:24 PM  
Let's start with repealing the 16th amendment and work from there. Yes, I know that won't help municipalities directly, but you've got to start somewhere and the top seems like a good place.
 
2012-07-12 06:53:37 PM  
I like looking at her for a little bit.

/But I didn't sell my bond funds

//Yet
 
2012-07-12 07:42:58 PM  
Who would buy a house you need a submarine to get to any way?

I gotchyer mil rate, buddy, rightchere.
 
2012-07-12 10:24:05 PM  

Debeo Summa Credo: The case in Stockton and San bernadino is that the municipalities, I believe, are choosing to default rather than cut services further.


Uh, you're going to have to show me that. The NPR program mentioned that Stockton has closed libraries, parks and other non-essential services and facilities, deferred important infrastructural maintenance, and fired 25% of its cops, 30% of its firefighters and 40% of the rest of its workforce.

It's not like a city can walk into Federal bankruptcy court and tell the judge, "Hey, we don't feel like making any cutbacks so we want you to approve this plan to fark over all our creditors."

I know that's not what you said, but by the same token I have not seen any evidence of game playing by our cities seeking bankruptcy protection. Our state laws place specific obligations on cities that don't let them drop below certain levels of administration and services. Stockton is pretty much at those levels and is still facing imminent insolvency. Hence the filing.

Oh, and word is that San Jose is the next big California city to go under. It's three times Stockton's size.
 
2012-07-13 02:18:24 AM  

DrPainMD: midigod: Eapoe6: Taxes are too high for everyone.

/yes the are
//YES, THEY ARE

You are very not correct, unless you think taxes have been too high for the last 30 years. If you do think that, then we must disagree.

[factcheck.org image 482x335]

Run that graph back to the early 1800s and you'll see the problem: taxes have been too high for too long.


Sounds about right- up until the late 18th century Americans were pretty satisfied with their taxes.

/Pay your taxes and work on having fiscal relationships between your levels of government that stop this kind of stuff from happening.
 
2012-07-13 09:48:30 AM  
Does anyone really care how much they pay in taxes? I mean, is that a big enough portion of your paycheck that you can't do something you want to do that you otherwise could have done without the tax?

I realize self-employed and small business owners are much more deeply affected by taxes than most, because that comes directly out of their pocket. But for most of the working public, taxes are just lines on their paystubs.
 
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