Blog

Daily Digest - Feb 9

Sunday, February 8, 2009, 12:57 PM
  • Stimulus: Because all economies have performance issues (Humorous Hysterical!)
  • The bonus racket (Hat Tip Fred)
  • Taleb at Davos (Video)
  • The Greatest Achievements of American Socialism (Slide Show)
  • Bond market calls Fed's bluff as global economy falls apart (Hat Tip PineCarr)
  • The Economic Outlook for 2009 and Community Banks
  • A Double Dip Layoff Economy
  • Steve Keen: "The Roving Cavaliers of Credit" (or Why Ben's Helicopter Will Fail)
  • Congressman/Dr. Ron Paul (Video - Hat Tip JoeManC)
  • Gingrich: Economy headed 'off a cliff'
  • Icelandic Lessons (Hat Tip Investorzzo) 
  • FSN Broadcast
  • Savior Based Economy, SC Gov. Mark Sanford 
  • Timmy's Talking TRILLIONS! Stimulus Battle May Signal Tough Sell for Bank Rescue
  • U.S. Taxpayers Risk $9.7 Trillion on Bailouts as Senate Votes

Economy 

Stimulus: Because all economies have performance issues (Humorous Hysterical!)

The bonus racket (Hat Tip Fred) 

"ISN'T it funny/How they never make any money/When everyone in the racket/Cleans up such a packet." That Basil Boothroyd poem was originally written about the movies, but it could just as well apply to banking. 

In its last three years, Bear Stearns paid $11.3 billion in employee compensation and benefits. According to its 2007 annual report, Lehman Brothers shelled out $21.6 billion in the three years before, while Merrill Lynch paid staff over $45 billion during the three years to 2007.

And what have shareholders got from all this? Lehman's got nothing (the company went bust). Investors in Bear Stearns received around $1.4 billion of JPMorgan Chase stock, now worth just half that after the fall in the acquirer's share price. Merrill Lynch's shareholders got shares in Bank of America (BofA) which are now worth just $9.6 billion, less than a fifth of the original offer value. Meanwhile, Citigroup paid $34.4 billion to its employees in 2007 and is now valued by the stockmarket at just $18.1 billion. 

Taleb at Davos (Video)

The Greatest Achievements of American Socialism (Slide Show)

Bond market calls Fed's bluff as global economy falls apart (Hat Tip PineCarr) 

The yield on 10-year US Treasury bonds - the world's benchmark cost of capital - has jumped from 2pc to 3pc since Christmas despite efforts to talk the rate down. 

This level will asphyxiate the US economy if allowed to persist, as Fed chair Ben Bernanke must know. The US is already in deflation. Core prices - stripping out energy - fell at an annual rate of 2pc in the fourth quarter. Wages are following. IBM, Chrysler, General Motors, and YRC, have all begun to cut pay.
The "real" cost of capital is rising as the slump deepens. This is textbook debt deflation. It was not supposed to happen. The Bernanke doctrine assumes that the Fed can bring down the whole structure of interest costs, first by slashing the Fed Funds rate to zero, and then by making a "credible threat" to buy Treasuries outright with printed money.

Mr Bernanke has been repeating this threat since early December. But talk is cheap. As the Fed hesitates, real yields climb ever higher. Plainly, the markets do not regard Fed rhetoric as "credible" at all.
Who can blame bond vigilantes for going on strike? Nobody wants to be left holding the bag if and when the global monetary blitz succeeds in stoking inflation. Governments are borrowing frantically to fund their bail-outs and cover a collapse in tax revenue. The US Treasury alone needs to raise $2 trillion in 2009.
Where is the money to come from? China, the Pacific tigers and the commodity powers are no longer amassing foreign reserves ($7.6 trillion). Their exports have collapsed. Instead of buying a trillion dollars of extra bonds each year, they have become net sellers. In aggregate, they dumped $190bn over the last fifteen weeks. 

Words to Regret? 

Sometimes people say things... 

"Call me cynical. This Depression talk is just outrageous - especially from people who didn't have the slightest sense that any of this was coming."
--Money Manager John Hussman, 10/6/08

"Obama Dismisses Great Depression Talk"
--headline of an ABC News report, 12/7/08

"It's a reminder that this is not the great depression. This is a legitimate recession and it's clearly not over yet. We're going to get more weakness for sure in Q1. But, again this is not the great depression."
--UBS economist James O'Sullivan, 1/30/09

"It all depends on the rate at which the economy contracts. This is not a depression. We're not going to get close to that."
--Economic forecaster Sean Snaith, Director of the Institute for Economic Competitiveness, 1/31/09

"2009 is going to be brutal. But it's not that bad...It's not a depression. ... This is sort of a normal, bad downturn."
--Chris Thornberg, co-founder of Beacon Economics and former UCLA economics professor, 1/28/09

"We're in a recession, not a Depression."
--from a Washington Times op-ed by syndicated columnist Suzanne Fields, 1/15/09

"We're not going to have a depression. There ain't gonna be no depression."
--Bank of New York Mellon Chief Economist Dick Hoey, 1/13/09

"No Depression; This Time, Uncle Sam Has Got Our Back"
--Washington Post op-ed by Laurence J. Kotlikoff, professor of economics at Boston University, and Perry Mehrling, professor of economics at Columbia University's Barnard College, 10/9/08

"It looks like the economy may go down somewhat, but nothing like a big recession or a depression."
--Bill Gates, Microsoft founder, 10/5/08

"Are we headed into another Depression?...Answer: No."
--Tim Leach, chief investment officer of US Bank's Wealth Management Group, 12/5/08

...that they probably wish they hadn't:

"IMF Says Advanced Economies Already in Depression" (Bloomberg , 2/7/09): 

The Economic Outlook for 2009 and Community Banks 

Many community banks have significant commercial real estate concentrations, and these loans are a particular concern in the current environment. At present, the performance of such loans has deteriorated only mildly. But, as I suggested earlier, we can't count on that situation to continue, since the downturn in commercial real estate construction is just getting started and is likely to be quite challenging. 

A Double Dip Layoff Economy 

A look at the companies which announced layoffs in December and January demonstrates that almost no industry is immune from job losses due to this contracting economy. Tech companies like Microsoft (MSFT) fired people. So did many retail operations like Macy's (M).Consolidation efforts led by Pfizer's (PFE) marriage to Wyeth (WYE) have begun to put tens of thousands of people out of work. GM (GM) is signaling that it may have to take another 15,000 or 20,000 jobs off its payroll in the next month to convince the federal government that it can become economically viable in a market in which car sales are still falling. 

A look at the companies which announced layoffs in December and January demonstrates that almost no industry is immune from job losses due to this contracting economy. Tech companies like Microsoft (MSFT) fired people. So did many retail operations like Macy's (M).Consolidation efforts led by Pfizer's (PFE) marriage to Wyeth (WYE) have begun to put tens of thousands of people out of work. GM (GM) is signaling that it may have to take another 15,000 or 20,000 jobs off its payroll in the next month to convince the federal government that it can become economically viable in a market in which car sales are still falling. 

Steve Keen: "The Roving Cavaliers of Credit" (or Why Ben's Helicopter Will Fail)  

Readers responded with great enthusiasm the last time I hoisted a big chunk of material from Australian economist Steve Keen's blog (see "Bernanke an Expert on the Great Depression?" )I was therefore quite gratified when he wrote asking me to cross post his latest piece. 

Keen is a fiercely independent thinker, and has other qualities I like: he's empirical, common-sensical, and cross disciplinary. His lack of deference for orthodoxy means he is seen among economists, as the British might say, as unsound.

Given how well conventional wisdom has served us, maybe it's time we take the iconoclasts more seriously.

The post debunks several notions near and dear to the Fed, most economists, and pretty much all financial commentators. First, that the Fed's current and expected money expansion moves are on a scale sufficient to create inflation. They aren't because, second, we are working with the wrong paradigm. The assumption is that we operate within a "fiat money" or "fractional reserve banking system". Keen argues these are incidental elements to what is more properly described as a "credit money system".

This post is LONG and very much worth your attention, so you might want to get a cup of coffee first.

From Keen (see his site for the footnotes). Boldface his:
Talk about centralisation! The credit system, which has its focus in the so-called national banks and the big money-lenders and usurers surrounding them, constitutes enormous centralisation, and gives this class of parasites the fabulous power, not only to periodically despoil industrial capitalists, but also to interfere in actual production in a most dangerous manner- and this gang knows nothing about production and has nothing to do with it." [1] 

Congressman/Dr. Ron Paul (Video, Housing part at about 3:30 minute point, Hat Tip JoeManC)

Gingrich: Economy headed 'off a cliff' 

Former House Speaker Newt Gingrich on Monday morning painted a dire picture of the U.S. economy, saying that it is headed "off a cliff" and that President Obama has failed to bring fresh and original thinking to the problem so far. 

Mr. Gingrich, 65, said that the nightmare scenario used by top financial officials to persuade President Bush into crafting the $700 billion bailout last fall is still on the way.

"Probably I would have voted yes," Mr. Gingrich said of the bailout, "just because if you have the secretary of the Treasury and the Federal Reserve chairman saying to you, 'Vote yes or we're all going to go off a cliff.'"

"Well, the fact is, we're all going to go off a cliff. That's what's happening. This is a much more profound problem than people think," said Mr. Gingrich, a Republican from Georgia, during a breakfast with reporters and columnists organized by the Christian Science Monitor.

"I keep getting told there's another [$1.2 trillion] in losses coming down the road, minimum. Goldman Sachs, I think, said Friday, $4 trillion to finish bailing out the banks," he said, predicting another "three to five years, at a minimum, of working our way through this." 

Icelandic Lessons (Hat Tip Investorzzo) 

Mass protests in Iceland culminated in almost 2% of the population standing outside the Althingi parliament building on January 24, demanding the dissolution of the government. Under severe pressure, Prime Minister Haarde reluctantly resigned, citing health problems. Astonishingly, the head of the central bank and the architect of the economy, David Oddson, has refused to step down. 

The tiny island nation has been rocked by the large jump in the unemployment rate, the nationalization of its largest banks, and the destruction of its currency. Its economy has sharply contracted, and inflation has skyrocketed. This sudden fall from prosperity in 2006 to depression in 2008 is shocking in a modern, European country. How could this occur, and is this a future that could happen to the United States?

To find the roots of the Icelandic crisis, we have to go back to 1991, when Oddson was elected Prime Minister on a platform of liberalizing the economy. Oddson privatized many state-owned companies, earning US$2 billion for Iceland's treasury. This seemed like a large sum at the time.

More controversial was his plan in 2000 to deregulate the financial industry and sell off the commercial banks to private investors. Many Icelanders felt this was a sweetheart deal to benefit his political allies.

Free from bureaucratic shackles, the newly private banks eagerly wrote mortgages at lower interest rates, with a smaller down payment than the government Housing Financing Fund. The real estate market boomed, and the value of housing was artificially inflated. Citizens felt comfortable amassing large loans as unemployment was very low.

The Icelandic commercial banks - Glitnir, Kaupthing, and Landsbanki - were able to grow swiftly by leveraging their bloated mortgage portfolios. Icelandic bankers limited by a small domestic economy travelled the world looking for investment opportunities. This new class of international financiers bought everything from toy stores to airlines to soccer teams. Purchases were used as collateral for other acquisitions. Soon the three largest banks dominated the entire Icelandic economy, as their share capitalization equalled 75% of the stock market. 


FSN Braodcast

Savior Based Economy, SC Gov. Mark Sanford

Timmy's Talking TRILLIONS! Stimulus Battle May Signal Tough Sell for Bank Rescue 

Obama will likely need to ask Congress for more money to recapitalize banks, as much as $1 trillion on top of the roughly $300 billion remaining in the current Troubled Asset Relief Program, according to an estimate by former Federal Reserve economist Ward McCarthy. That will be an even tougher sell for the new president than the stimulus plan, which is headed for a Senate vote this week after passing the House with no Republican support.

That package, at least $780 billion of spending and tax cuts aimed at boosting consumer demand and creating jobs, is just a part of what it will take to pull the economy out of the 14- month-old recession. The stimulus will be effective only if credit markets, currently frozen by illiquid assets clogging banks' balance sheets, begin to function again.

"It will take an enormous effort to build broader public support" for another bank rescue plan, said Thomas Mann, a congressional scholar at the Brookings Institution in Washington. "Had the stimulus gone through swimmingly it would have made it easier."

 U.S. Taxpayers Risk $9.7 Trillion on Bailouts as Senate Votes

Feb. 9 (Bloomberg) -- The stimulus package the U.S. Congress is completing would raise the government's commitment to solving the financial crisis to $9.7 trillion, enough to pay off more than 90 percent of the nation's home mortgages. [my enphasis added]

The Federal Reserve, Treasury Department and Federal Deposit Insurance Corporation have lent or spent almost $3 trillion over the past two years and pledged to provide up to $5.7 trillion more if needed. The total already tapped has decreased about 1 percent since November, mostly because foreign central banks are using fewer dollars in currency-exchange agreements called swaps. The Senate is to vote early this week on a stimulus package totaling at least $780 billion that President Barack Obama says is needed to avert a deeper recession. That measure would need to be reconciled with an $819 billion plan the House approved last month.

Only the stimulus package to be approved this week, the $700 billion Troubled Asset Relief Program passed four months ago and $168 billion in tax cuts and rebates approved in 2008 have been voted on by lawmakers. The remaining $8 trillion in commitments are lending programs and guarantees, almost all under the authority of the Fed and the FDIC. The recipients' names have not been disclosed.

"We've seen money go out the back door of this government unlike any time in the history of our country," Senator Byron Dorgan, a North Dakota Democrat, said on the Senate floor Feb. 3. "Nobody knows what went out of the Federal Reserve Board, to whom and for what purpose. How much from the FDIC? How much from TARP? When? Why?"

Financial Rescue

The pledges, amounting to almost two-thirds of the value of everything produced in the U.S. last year, are intended to rescue the financial system after the credit markets seized up about 18 months ago. The promises are composed of about $1 trillion in stimulus packages, around $3 trillion in lending and spending and $5.7 trillion in agreements to provide aid.

Federal Reserve lending to banks peaked at a record $2.3 trillion in December, dropping to $1.83 trillion by last week. The Fed balance sheet is still more than double the $880 billion it was in the week before Sept. 17 when it agreed to accept lower-quality collateral.

The worst financial crisis in two generations has erased $14.5 trillion, or 33 percent, of the value of the world's companies since Sept. 15; brought down Bear Stearns Cos. and Lehman Brothers Holdings Inc.; and led to the takeover of Merrill Lynch & Co. by Bank of America Corp.

The $9.7 trillion in pledges would be enough to send a $1,430 check to every man, woman and child alive in the world. It's 13 times what the U.S. has spent so far on wars in Iraq and Afghanistan, according to Congressional Budget Office data, and is almost enough to pay off every home mortgage loan in the U.S., calculated at $10.5 trillion by the Federal Reserve.

Endorsed Financial Adviser Endorsed Financial Adviser

Looking for a financial adviser who sees the world through a similar lens as we do? Free consultation available.

Learn More »
Read Our New Book "Prosper!"Read Our New Book

Prosper! is a "how to" guide for living well no matter what the future brings.

Learn More »

 

Related content

19 Comments

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Daily Digest - Feb 9

09analystgraphicfull.jpg

< 10% of analysts recommend selling?

monkey.jpg

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Re: Daily Digest - Feb 9

Feb. 9 (Bloomberg) -- The stimulus package the U.S. Congress is
completing would raise the government's commitment to solving the
financial crisis to $9.7 trillion, enough to pay off more than 90 percent of the nation's home mortgages. [my enphasis added]

So there you go.....  I'm proved right yet again.

Close the banks down, wipe all debts, restart a new sustainable zero growth zero usury economy.

We already have everything we coul;d ever wish for, why want more?

Mike. 

straight's picture
straight
Status: Silver Member (Offline)
Joined: Aug 25 2008
Posts: 103
Re: Daily Digest - Feb 9

"Wielding A Tin Cup And A Gun:

Now look ahead a few weeks, or at most a few months, to the time when President Obama has to send his Treasurer over to Asia to ask them to fund most of his $US 2.5 TRILLION budget deficit for this fiscal year. All of Asia, including China, says no. Geo-politically, this is already feared. The evidence is simply that the first foreign trip that Secretary of State Lady Hillary will make is to - Asia! She is not going to Europe or anywhere else on this trip. She is going to where the money is, to ask to borrow it.

Here, the global pivot is structural. The fact is that Asia could help the US to fund its budget deficit by stripping themselves of more than half of all their foreign exchange reserves this year. But what about NEXT year? They cannot do that and the Asians know it. The structural point is that there is a forward time horizon in front of the US of only ONE year to resolve its own budget deficit problems as well as its now unrepayable external debts and. That year is THIS year - 2009.

The Asians know this too, as does Japan, Russia and the European Union. What they fear is that a financial collapse of the US will hurt them. If Asia lends to the US, it will crash next year, If Asia does not, the US will crash THIS year."

 © 2009 - The Privateer http://www.the-privateer.com [email protected] (reproduced with permission)

The above excert is from "The Privateer" a newsletter i subscribe too her in Oz.

Food for thought.  Stewart, Brisbane.

 

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Daily Digest - Feb 9

I'm digging up the article or letter I posted a while back, it was the CBOT estimate to service the debt on a 1 trillion dollar deficit.

I think it will be interesting to estimate that debt servicing at 9 X.

Just a hunch, but I think it will make a minimum payment a maxed out card look pretty pale by comparison.

In any event, it is pathetic to see taxes wasted on debt servicing, especially for something that can not and will not work. 

 

cwixom's picture
cwixom
Status: Bronze Member (Offline)
Joined: Aug 18 2008
Posts: 44
Re: Daily Digest - Feb 9

According to the Department of Transportation every $1B spent on transportation infrastructure creates 35,000 jobs.  Now try to follow the complex math... We've lost 3.5M jobs, to get them back we only need to spend $100B (3,500,000 / 35,000 x $1B = $100B).

BUT WAIT, THERE'S MORE!!!

They say that fixing old roads vs building new roads ups that number by 9%.  (UhOh, those nasty percentages, they are very complex.) 35,000 x 1.09 = 38,150 new jobs per billion spent so we really only need $91.74B to put all those people back to work.

BUT WAIT, THERE'S MORE!!! (is this sounding like a late night infomercial?)

They also say that, according to the folks in Massachusetts, if you devote the money to trains and busses that it creates 19% more jobs.  35,000 x 1.19 = 41,650 new jobs per billion spent so if we spend wisely on trains and busses we only need $84.03B to put all those people back to work.

Now watch carefully because this is where the real difficulty in understanding this math occurs.

($84B needed) x (GP + PF + CL) / GSEF =  $840 Billion of your dollars for the stimulus package.  Where GP = Government Pork, PF = Political Favors, CL = Commitments to Lobbyists, and GSEF = Government Spending Efficiency Factor (which is usually < 0.5).   This is government math so I hope I didn't lose anyone.  If you need additional help please contact Benny B and the Spinners who are playing nightly at the Fed.

See ya in front of the train or under the bus!!

(Primary data source: The Economist, Feb 7, 2009 edition, page 27, article title "Be careful what you wish for")

 

xxxxxx's picture
xxxxxx
Status: Martenson Brigade Member (Offline)
Joined: Nov 27 2008
Posts: 32
Re: Daily Digest - Feb 9

I continue to be amazed that the national press doesn't seem to understand the difference between the Federal Reserve and the Treasury.  The two "journalists" who wrote the last article in the briefing (from Bloomberg.com) combine the money that the Treasury has spent in the bailout along with the loans from the Federal Reserve.  I find this approach in virtually every news article on the subject.  It would seem that everyone in the media is ignorant about the law passed in 1913 creating the Fed as a private corporation or they are just lazy - I can't comprehend a conspiracy that is this widespread and transparent.  The only thing that gives me pause in lambasting these people is realizing how late in life I came to understand how things work.

The danger in allowing this to go on unchallanged is that people don't get the accurate information about how our monetary system works.  Without an understanding that there are zero tax payer dollars in the Fed we don't allow people to understand where money comes from, how it is created and how interest on debt ensures perpetual indebtedness.  I've written more letters than I have fingers on this subject to the people who write these articles.  Perhaps Chris's series on public television will move some of these folks to pick up a book on the subject or, better yet, take the Crash Course. 

cwixom's picture
cwixom
Status: Bronze Member (Offline)
Joined: Aug 18 2008
Posts: 44
Re: Daily Digest - Feb 9

From one of today's items above:

"It will take an enormous effort to build broader public support" for
another bank rescue plan, said Thomas Mann, a congressional scholar at
the Brookings Institution in Washington.

Enormous!!! The calls, letters and faxes from the public when they were considering TARP1 were between 200 and 300 to 1 AGAINST!  I guess that they are expecting something more like 600 to 1 against for the next one. They passed TARP1 anyway.  Why should we expect any less from the same group of clowns on TARP2?

And Bill Sharon, I agree with your comments about understand the difference between the Federal Reserve and the Treasury.  They also don't know we live in a republic and not a democracy.  Even the editors of the Economist seem to be able to make that error, why not the rest of the sheeple?

Gibber's picture
Gibber
Status: Bronze Member (Offline)
Joined: Oct 4 2008
Posts: 35
Re: Daily Digest - Feb 9

Steve Keen's original article is at

http://www.debtdeflation.com/blogs/2009/01/31/therovingcavaliersofcredit/

In the discussion he noted a draft paper that is a good read as well. Title is "Bailing out the Titanic with a Thimble"

http://www.debtdeflation.com/blogs/2009/01/31/therovingcavaliersofcredit/

For anyone who wants to check in on his blog from time to time the link is at

http://www.debtdeflation.com/blogs/

he is definitely an iconoclast. 

I also liked his article on Minsky

http://www.debtdeflation.com/blogs/2008/03/10/time-to-read-some-minsky/

Denny Johnson's picture
Denny Johnson
Status: Gold Member (Offline)
Joined: Aug 13 2008
Posts: 348
Re: Daily Digest - Feb 9

For those that don't regularly check his site, a great new Clusterfuck Nation Chronicle:
http://www.kunstler.com/

Trad's picture
Trad
Status: Bronze Member (Offline)
Joined: Jan 1 2009
Posts: 25
Re: Daily Digest - Feb 9

Didn't hear anything about this on the MSM.

Rep. Kanjorski: $550 Billion Disappeared in "Electronic Run On the Banks"   @ 2:15

joemanc's picture
joemanc
Status: Martenson Brigade Member (Offline)
Joined: Aug 16 2008
Posts: 834
Re: Daily Digest - Feb 9

Sen. Harry Reid on taxation: it's voluntary. Speechless, scratching my head, outraged are a couple of adjectives that come to mind after watching this video.

pinecarr's picture
pinecarr
Status: Diamond Member (Offline)
Joined: Apr 13 2008
Posts: 2247
Re: Daily Digest - Feb 9

Denny, good Kunstler article; thanks for pointing it out.

Davos, I think you outdid yourself with your picture today!  Too funny!

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Re: Daily Digest - Feb 9

http://www.chartingstocks.net/2009/02/feds-seize-two-more-banks/

Feds Seize Two More Banks

Friday, February 6, 2009
What Friday would be complete without a bank failure (or two)?

Federal regulators shut down a bank in
Southern California and another in the Atlanta area today, bringing the
number of U.S. failures this year to eight in almost as many weeks.
This is the 33rd collapse since the depression began.

Federal Deposit Insurance Corp.
announced that Ga.-based FirstBank Financial Services and Calif.-based
Alliance Bank have been seized.

FirstBank had total assets of roughly
$337 million as of Dec. 31, and $279 million in total deposits while
Alliance Bank had $1.14 billion in assets and $951 million in total
deposits, according to the FDIC.

propamanda's picture
propamanda
Status: Bronze Member (Offline)
Joined: Sep 17 2008
Posts: 61
Re: Daily Digest - Feb 9

Hi Davos.

Thanks for posting the Daily Digest.  I look forward to it every day.

Check this one out -

California is going to have to release prisoners because it can't afford to keep them locked up!

http://www.nytimes.com/2009/02/10/us/10prison.html?_r=1

Amanda

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Daily Digest - Feb 9

Hello PropaManda:

It is a pleasure to contribute to this fine community Chris and everyone created. Thank you for the Hat Tip, I will post this, anything to save 900 million ?!?!?! I wonder what will happen if California has to lay off law enforcement next? 

gregroberts's picture
gregroberts
Status: Diamond Member (Offline)
Joined: Oct 6 2008
Posts: 1024
Re: Daily Digest - Feb 9

 I wonder what will happen if California has to lay off law enforcement next? 

UPDATED: Redding City Council votes to lay off 14 workers

"The council approved the employee and program cuts as recommended by Starman, which included laying off three firefighters and eliminating six positions in the police department. The council also voted to lay off employees in development services, community services, support services and personnel."

http://www.redding.com/news/2008/dec/15/redding-city-council-proceeding-budget-cuts/

Greg

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Daily Digest - Feb 9

Hello Greg:

Thank you for the hat tip! Like watching domino's fall. I can now only wonder if companies will start opening and expanding civilian security. I think the house cleaning business (companies that are springing up to handle foreclosures---especially ones where owners are traumatized (fiscally and or emotionally) and leave everything behind) won't be the only businesses who do well. Of course all the folks leaving the big house will probably do okay to.

Take care 

CB's picture
CB
Status: Gold Member (Offline)
Joined: Mar 18 2008
Posts: 365
Re: Daily Digest - Feb 9

The subject of various states fiscal health came up in one of the previous "daily news" discussions and Wyoming's relative good fortune was mentioned. It is interesting to note that Wyoming receives the biggest per-capita Federal subsidy of the 50 states (N. Dakota is right up there too... along with NY) including a billion dollars from energy development leases and related Interior department payments. So along with its small and mainly rural population - and being too cold in the winter to attract the poor and infirm - it has a big hand in the Federal pocket.

Mike Pilat's picture
Mike Pilat
Status: Platinum Member (Offline)
Joined: Sep 8 2008
Posts: 929
Re: Daily Digest - Feb 9

Police services can be a great luxury when things are humming along smoothly. But a less complex society will have difficulty maintaing police and prisons. Don't outsource your protection and don't fall victim to the "trust us" doublespeak that is put out. Your safety is primarily your own responsibility. You must take whatever means you deem necessary to remain secure, depending on your unique set of circumstances.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Login or Register to post comments