Global Economy Bursting?

[Couch Potato]

Your assertion of cause and effect is not supported by the data or facts.

It is very clear by the data that the rate of property tax was fixed at 1% of value by Prop 13, however, the property tax revenue increase by 1000% over 33 years.

The analysis shows that every time a property was sold, it was revalued to the sales price and taxed at 1% on an ongoing basis at that new value. Property values rose faster than the growth rate of population and the rate of inflation.

Therefore Prop 13 had a "stimulus" effect at producing more revenue, not less. The payback of the cut was immense but was overpowered by increased spending.

Check again and you will see property tax revenue is still 10% below the pre-prop13 levels when adjusted for inflation and population growth. :new_all_coholic:

 

[Big ole Boy]

global finance wins and nationalism looses

.... everything is OK now ...... the ruling class must have figured out how to rule .....

... stocks are up , US economy is not in recession and now all congress has to do is raise taxes next month to keep the low hanging fruit from going bust ... like the US military budget ...

.... all of a sudden .... you can here this big gasp of air going out of the teaparty ......

.... dead calm ......... all of a sudden it has become shockingly clear that the ruling class has a firm grasp .....

..... looks like the US is zooming now to police state ......

.... all of a sudden .... conservative talk radio looks pointless .. .....

.....

 

[Randolph Kinney]

Check again and you will see property tax revenue is still 10% below the pre-prop13 levels when adjusted for inflation and population growth. :new_all_coholic:

Population growth and inflation combined over the 33 years was 400%. 4 times $10.3 billion pre-Prop 13 = $41.2 billion which is less than the $49 billion Prop 13 for 2010-11 the last time I looked, what about you? :new_all_coholic:

 

[Workbox]

Europe plan raises hope but will need to prove itself in practice

http://www.washingtonpost.com/busin...-in-practice/2011/10/27/gIQAw0XTMM_story.html

What many folks do not understand is that all this can change before their next meeting in November. In the meantime they are kicking the can down the road.

 

[Randolph Kinney]

Europe plan raises hope but will need to prove itself in practice

http://www.washingtonpost.com/busin...-in-practice/2011/10/27/gIQAw0XTMM_story.html

What many folks do not understand is that all this can change before their next meeting in November. In the meantime they are kicking the can down the road.

The region also committed itself to reigniting economic growth, considered critical for the plan to work.

The headline feature — the 50 percent cut in the face value of roughly $240 billion in Greek bonds held by banks, pension funds and other investors — must still be finalized in follow-up talks to take place by year’s end.


Credit-Default Swaps as Hedge Threatened by Greece Debt Plan

http://news.businessweek.com/article.asp?documentKey=1376-LTR1HS1A1I4H01-3EP3HFL6NOPO75LGEPN5R3TVRS

The net notional value of default swaps outstanding on Greece has fallen from $5.3 billion at the start of the year, according to the Depositary Trust & Clearing Co., which maintains a warehouse of trading data. The total is a fraction of the $390 billion Greek bond market.


Gauging the Fallout of Another Rescue

http://www.nytimes.com/2011/10/28/business/gauging-the-fallout-of-another-rescue.html

Of the 340 billion euros in Greek government debt, only about 200 billion euros — most of it owed to banks — falls under the scope the accord, meaning the country’s total sovereign debt would at most be reduced by around 30 percent at best. The rest of the debt is controlled by the European Central Bank, the International Monetary Fund and other institutions that have said they would not participate in a debt restructuring.

 

[Randolph Kinney]

For some long-term perspective, today's chart illustrates the Dow adjusted for inflation since 1925. There are several points of interest. For one, when adjusted for inflation, the bear market that concluded in the early 1980s was almost as severe as the one that concluded in the early 1930s. Also, the inflation-adjusted Dow is up 145% since its 1929 peak and trades 74% above its 1966 peak – not that spectacular of a performance considering the time frames involved. It is also interesting to note that the Dow is up 86% from its March 9, 2009 low which is actually slightly more than what the inflation-adjusted Dow gained from its 1966 peak to today.

 

[Riick]

This should work perfectly..
​

What The Economist thinks of Europe’s rescue plan:
"This week’s summit was supposed to put an end to the euro crisis. It hasn’t"

Read More here: http://www.economist.com/node/21534849

.

 

[Randolph Kinney]

This should work perfectly..
​

What The Economist thinks of Europe’s rescue plan:
"This week’s summit was supposed to put an end to the euro crisis. It hasn’t"

Read More here: http://www.economist.com/node/21534849

.

The problem the EU and ECB has created with covering over a default with the so called voluntary 50% cut in principle is that there is no way to directly hedge against owning sovereign debt. That forces investors to demand even higher interest rates or not buy at all.

As everyone knows, you can't pay down debt with out growth in tax revenue or cuts in spending (social programs and public works). With so much of the tax revenues consumed by debt service, it is a sure thing that it can't be done.

Therefore a sure default is coming.

 

[Randolph Kinney]

Europe's rescue euphoria threatened as Portugal enters 'Grecian vortex'

http://www.telegraph.co.uk/finance/...atened-as-Portugal-enters-Grecian-vortex.html

Monetary contraction in Portugal has intensified at an alarming pace and is mimicking the pattern seen in Greece before its economy spiralled out of control, raising concerns that the EU summit deal may soon washed over by fast-moving events.

...

Whether the EFSF alone is up to the job of containing the euro crisis may depend on how it is constructed. The apparent plan for "first loss" insurance on bonds concentrates risk, endangering the AAA rating of France and other creditor states that anchor the fund. "It is too complex and potentially dangerous," said RBS.

Japanese investors who bought the first EFSF bonds this year under entirely different assumptions are facing big losses as the instrument loses market credibility. They are angry that the fund has metamorphosed into a high-risk monoline insurer. The fund will in any case cover only new issues of debt. This instantly degrades old debt. There will be abritrage between insured and insured countries. Market forces are being profoundly distorted.

 

[Randolph Kinney]

Euro Declines as Italian Bond Sale Demand Revives Sovereign-Debt Concern

http://www.bloomberg.com/news/2011-...ce-versus-dollar-on-debt-plan-optimism-e.html

If it’s accepted, “the 50 percent nominal haircut on the proposed bond exchange would be viewed by the agency as a default event under its Distressed Debt Exchange criteria,” Fitch Ratings said in a statement today.

“It’s interesting that Fitch is stating what most people see as obvious that there has been a selective default in Greece,” said David Mann.