Global Economy Bursting?

[Randolph Kinney]

Financial Giants Are Moving Jobs Off Wall Street

http://www.nytimes.com/2012/07/02/b...?_r=1&nl=todaysheadlines&emc=edit_th_20120702

New York’s biggest investment houses are shifting jobs out of the area and expanding in cheaper locales in the United States, threatening the vast middle tier of positions that form the backbone of employment on Wall Street.

The shift comes even as banks consider deeper staff cuts here, which could undermine the state and city tax base long term.

The potential shift has profound implications for New York’s tax base and economy because of Wall Street’s outsize financial profile. Last year, the industry contributed 14 percent of New York State’s tax revenue.

 

[Randolph Kinney]

Mammoth Lakes, California, to File for Bankruptcy Protection

http://www.businessweek.com/news/20...-california-to-file-for-bankruptcy-protection

Mammoth Lakes, California, voted to file for bankruptcy to protect itself from a $43 million court judgment, the resort town said.

The city council voted to seek bankruptcy after its largest creditor, Mammoth Lakes Land Acquisition, won a court order requiring the city to pay the judgment by June 30, according to a statement on the city’s website. Under Chapter 9 of the U.S. Bankruptcy Code, municipalities can halt court actions against it while they seek to reorganize their finances. The tactic is common among corporations that file so-called Chapter 11 bankruptcies.

The decision comes five days after the northern California city of Stockton filed for bankruptcy with plans to try to impose cuts on bondholders and employees. Vallejo, California, filed bankruptcy in 2008 and used court protection to cut benefits to retirees, renegotiate labor contracts and reduce the interest it was paying lenders. The city exited bankruptcy last year.

California’s cities have been struggling to pay their debts in the wake of the financial and housing crisis.

 

[Randolph Kinney]

Stockton Battle With Bondholders Begins This Week

http://www.businessweek.com/news/2012-07-02/stockton-battle-with-bondholders-begins-this-week

Stockton, California, which last week became the biggest U.S. city to seek court protection, will begin a historic effort this week to be the first American city to use bankruptcy to successfully impose losses on bondholders.

Lawyers for Stockton are to appear in U.S. bankruptcy court in Sacramento July 6 for the initial hearing in the case. City council members have set aside more than $3 million for the first year of a bankruptcy court fight with bondholders and labor unions over how to divide a smaller budget.

No U.S. municipality has used bankruptcy to force bondholders to take less than the full principal due since at least 1981, and possibly as far back as the 1930s, according to lawyers and court records.

“We’re trying to spread the pain, unfortunately, to others besides employees,” Stockton City Manager Bob Deis told council members at a June 26 hearing. Before the June 28 bankruptcy filing, Stockton officials said they would try to impose cuts on all creditors.

“Whenever there’s a bankruptcy or default, there’s a psychological twinge that goes through the issuer community and the market,” Tom Dresslar, a spokesman for California Treasurer Bill Lockyer, said in a telephone interview. “If other issuers, including the state, are stained as a result of Stockton’s bankruptcy then potentially when we go to market we suffer the consequences.”

The two biggest creditors named in the filing reflect the groups most likely to face cuts imposed as part of the bankruptcy: bondholders and city employees.

Stockton said its biggest unsecured creditor is the California Public Employees’ Retirement System, or Calpers, the largest U.S. pension fund, owed $147.5 million, followed by Wells Fargo (WFC) (WFC) Bank NA, as trustee for $124.3 million in pension obligation bonds, and Wells Fargo as trustee for three other sets of bondholders owed $107 million, according to court papers.

 

[Randolph Kinney]

Fitch cuts Fresno, California ratings

http://in.reuters.com/article/2012/07/02/idINWNA026920120702

KEY RATING DRIVERS FAILURE TO BALANCE BUDGET: The downgrade reflects Fitch's heightened concerns about the city's ability to achieve fiscal stabilization given the adoption of a fiscal 2013 budget that failed to achieve important cost saving measures.

 

[Restrain]

In other news, the city of Irving, TX, a Dallas suburb has more building permits than in years, with numerous new developments popping up. Numerous companies are in discussions to bring in major divisions or corporate headquarters. Also, Texas has more Fortune500 corporate headquarters than New York.

 

[JamesC26]

In other news, the city of Irving, TX, a Dallas suburb has more building permits than in years, with numerous new developments popping up. Numerous companies are in discussions to bring in major divisions or corporate headquarters. Also, Texas has more Fortune500 corporate headquarters than New York.

Wonder why that is?

 

[Terrel L. Shields]

Wonder why that is?

Compare the tax situation in California and Texas.... ??? maybe i merely restate the obvious you knew...

 

[Couch Potato]

Compare the tax situation in California and Texas.... ??? maybe i merely restate the obvious you knew...

Not so much the amount of the taxes as it is the quality of services you get for those taxes. Texas does a much better job of spending the taxes they collect on things that help business rather than on things that hinder business. California loves to use tax dollars on regulation for business that in turn requires a company to spend even more of their resources. On the other hand Texas would use those same tax dollars on services for business that in turn frees up other resources.

Taxes in California are like paying someone to beat you, which does not appeal to most but some seem to like that sort of thing. :new_all_coholic:

 

[Randolph Kinney]

California Regulators, It's Time to Open the Golden State for Business Once Again

http://www.forbes.com/sites/garysha...pen-the-golden-state-for-business-once-again/

Once synonymous with opportunity and innovation, California is now firmly associated with an unfriendly business environment, largely due to heavy-handed government and overregulation. For the eighth straight year, Chief Executive has ranked California as the worst state to conduct business, pointing to excessive government regulation of businesses as one of the key reasons the state fared so miserably.

Hovering just over 10 percent, California’s unemployment rate is among the highest in the nation. Last year, the state ranked 50th in the nation in the category of new business creation. Considering these sobering statistics, it’s hard to understand why state agencies would continue to generate new rules that hamper job growth and economic creation.

 

[Randolph Kinney]

AB 32 poised to bankrupt California

http://www.examiner.com/article/ab-32-poised-to-bankrupt-california

When California passed the Global Warming Solutions Act in 2006, it probably didn’t know that the Act—also known as AB 32—would nail California’s coffin shut.

California Manufacturers & Technology Association (CMTA) issued a report that studied the fiscal and economic impact of the Act in the state. The picture is not pretty.

In the words of CMTA’s press release, “Families and state’s economy [will] pay dearly for global warming policies.” That’s putting it mildly.

Families will pay $2,500 annually by 2020. AB 32 will cost consumers $135.8 billion cumulatively by then. This is more than two and a half times California’s annual spending on education.

California will have 262,000 fewer jobs in 2020 because of AB 32.