Connect Dots: July/August Financial Reckoning?

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Nichoman's picture
Nichoman
Status: Gold Member (Offline)
Joined: Nov 1 2008
Posts: 422
Connect Dots: July/August Financial Reckoning?

In case those are familiar w/ 3 pieces of information suggesting risk of a July/August Day Of Reckoning.

Two things...

  1. Recall CM at least half dozen reports/posts (all?).
  2. Principles of Exponential Growth (Fenway Park?) such as projections and extrapolate.

First piece of info.

May Treasury Report... 

  • FY 09 Shortfall Deficit...$992 Billion; nearly 3X FY08 versus $319 Billion May FY 08. 
  • FY 09 May's deficit...$189.7 Billion; versus consensus of $181 Billion (worse than predicted)
  • Outlays up 6%;  Receipts down 6%.
  • The report can be accessed at http://www.fms.treas.gov/mts/mts0509.pdf

Second piece...Worsening California Situation by State Controller

Now this post from "Market Skeptic" titled California leads Nation Into Bond Market Abyss.

  http://www.marketskeptics.com/2009/06/california-leads-nation-to-bond-default.html

Consistent that within a couple months...hard financial realities/choices and repercussions will be replacing talk of "green shoots".

 

Nichoman

 

 

 

Nichoman's picture
Nichoman
Status: Gold Member (Offline)
Joined: Nov 1 2008
Posts: 422
Re: Connect Dots: July/August Financial Reckoning?

Two additional pieces of information from Mish suggesting...TSHTF is starting toward a second (and bigger) collapse in next several weeks.

First...housing market is locking up at least as bad as last year due to rapidly interest rising rates.

 http://globaleconomicanalysis.blogspot.com/2009/06/mortgage-market-remains-solidly-frozen.html

Second...California revenues are collapsing at amazing and increasingly downward rates suggesting from basic calculations real state deficit could be up to 50% higher than the official $24.3 Billion shortfall....or $35+ Billion.

See...

http://globaleconomicanalysis.blogspot.com/2009/06/california-50-days-from-financial.html

Impact on further rising of interest rates...banks...more foreclosures as "second wave" of mortgage loans arrive.

I can envision a second collapse of stock markets...not only rivaling...but exceeding last year.

Now what does that do to pensions...and on and on to other things in a vicious and intensifying loop of unsustainable debt.

 

Nichoman

 

DrKrbyLuv's picture
DrKrbyLuv
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 1995
Re: Connect Dots: July/August Financial Reckoning?

Nichoman - you bring up some great points that are being ignored by most economists.  We are trapped in a mathematical certainty that can only be delayed.  I hope you're wrong about the time frame but I have no evidence to doubt you.

Larry

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