Global Economy Bursting?

[Randolph Kinney]

Support growing for QE3

http://www.nypost.com/p/news/business/support_growing_for_qe_i4L8yH52x0QDpxz3soU5nK

 

[Randolph Kinney]

California May Seek Bridge Loan Before Deadline for Debt-Limit Decision

http://www.bloomberg.com/news/2011-...-before-deadline-for-debt-limit-decision.html

Without the loan or notes, the state could run out of cash as it did in 2009, when it issued $2.6 billion of IOUs. California plans to sell an estimated $5 billion of so- called revenue-anticipation notes, or RANs.

 

[Couch Potato]

California May Seek Bridge Loan Before Deadline for Debt-Limit Decision

http://www.bloomberg.com/news/2011-...-before-deadline-for-debt-limit-decision.html

Without the loan or notes, the state could run out of cash as it did in 2009, when it issued $2.6 billion of IOUs. California plans to sell an estimated $5 billion of so- called revenue-anticipation notes, or RANs.

A surprisingly smart move. I would expect federal payments to states to be at the bottom of the priority list on August 3rd.

 

[Austin]

California May Seek Bridge Loan Before Deadline for Debt-Limit Decision

http://www.bloomberg.com/news/2011-...-before-deadline-for-debt-limit-decision.html

Without the loan or notes, the state could run out of cash as it did in 2009, when it issued $2.6 billion of IOUs. California plans to sell an estimated $5 billion of so- called revenue-anticipation notes, or RANs.

That is not a bridge loan, that is what you call a "Hot Potato Loan." If you guys will pool your funds and lend me a million $ I will pay you back 2 million$ when I get my lotto winnings. Any takers? Of course I will use the money to help the children.

 

[Restrain]

"Psst. Hey, mister. Have I got a deal for you. I've got this bridge to sell...."

 

[Big ole Boy]

Mitch McConnell proposal is better than what?

.... Is it better to give the White House an open checkbook to puff the GDP figures until next year or is it better to cut their hands off and let them take the draconian process of picking and choosing who to pay?

.... or cap the debt ceiling increases through the end of his term with a deceleration rate in the amounts of increases ....(with new taxes off the table)

...otherwise, walk away ...... this is not poker ......

...were not playing poker ...

.... let him eat dirt

...I say let him be dictator, but cut off all his money .... and make him expose himself

 

[Randolph Kinney]

Moody’s Places 7,000 Municipal Ratings Tied to U.S. on Downgrade Review

http://www.bloomberg.com/news/2011-...-ratings-tied-to-u-s-on-downgrade-review.html

 

[Austin]

As appraisers we know the present value of future benefits tempered by the economic trend for coming years defines value as of date of appraisal. This morning's readings showed some interesting future events that will impact present day decisions. First: It appears that from 18 months to 5 years out the EU is toast. Just a matter of time. Second: The US has 2.5 million surplus housing units with more coming on line all the time. That is almost 2 years worth of home construction in surplus meaning for the next two years and more nothing is going to happen in the housing business to aid the economy.
From what I have been reading the NFL season is pretty well toast and whatever the dems and pubbies compromise or don't compromise on will shut things down for years to come. The present value of future events ain't looking too good right now.

 

[Randolph Kinney]

Do the math. Deficit spending is driven by spending. Tax revenues cannot make up the difference even at 100% tax rate on incomes at this point in time with the programmed increase spending.

The only way out is to cap spending growth at 50% of GDP growth or less. Tax revenues grow with GDP growth. In other words, tax revenue has to grow faster than spending. This all assumes positive GDP growth. It all falls apart with negative GDP growth. The wild card is interest rates. If interest rates rise, more of the tax revenue goes to service interest payments on the national debt. That needs to be subtracted from spending but that relationship will never be applied to the budget.

My guess is that the U.S. has had it. There comes a point where external events take over and sets the political and economic policy. That will cause a revolution and overthrow of the government.

 

[Randolph Kinney]

Moody’s Warning Pressures U.S. on Debt Deal

http://www.bloomberg.com/news/2011-...-for-downgrade-by-moody-s-as-talks-stall.html

China needs to “seriously assess the risks” of its holdings as the U.S. faces a “worrisome” economic outlook, Yu Bin, a senior government researcher, told reporters at a briefing in Beijing today.

The Aaa ratings of financial institutions directly linked to the U.S. government, including Fannie Mae, Freddie Mac, the Federal Home Loan Banks, and the Federal Farm Credit Banks, were also put on review for cuts, Moody’s said. It also placed 7,000 municipal ratings on review for possible downgrade.