The New York State Treasury Just Came Up $2 Billion Short, And Is Resorting To An Accounting Move To Avoid Insolvency
by ilene - March 18th, 2010 3:42 pm
The New York State Treasury Just Came Up $2 Billion Short, And Is Resorting To An Accounting Move To Avoid Insolvency
Courtesy of Joe Weisenthal at Clusterstock
Ok, we got through the financial crisis. We’re getting through the European crisis. Jobs are coming back. Shippers are bringing boats back onto line because they’re seeing increased trade.
Everything’s great.
BUT there’s one looming crisis, and that is the states.
According to The New York Times, Albany has just learned that state coffers are coming in $2 billion lighter than expected.
As such, in order to avoid default, the state will be delaying $500 million in income tax rebates. Governor Paterson says he "apologizes" for the inconvenience.
A question is: where are the ratings agencies pointing out the obvious, that New York State debt is hardly secure? Are they afraid of the cascade of sales from bullish muni fund managers forced to liquidate non-agency debt? Would they not be downgrading a company that suddently found itself $2 billion in the hole?
Please.
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Governor Paterson: “New York Runs Like a Payday Loan Operation”
by ilene - January 7th, 2010 1:18 pm
Governor Paterson: "New York Runs Like a Payday Loan Operation"
Courtesy of Mish
I rarely applaud politicians but I will gladly give New York governor Patterson a standing ovation for his state of the state address on Wednesday.
Please consider Paterson Speech Chastises Lawmakers
In a strikingly blunt State of the State address, Gov. David A. Paterson chastised the lawmakers seated before him on Wednesday, saying they had spent the state into near-ruin and stood by as a plague of political corruption destroyed New Yorkers’ trust in their government.
“You have left me and other governors no choice,” Mr. Paterson, the former State Senate minority leader, said. “Whether it be by vetoes or delayed spending, I will not write bad checks, and we will not mortgage our children’s future.”
The public scolding drew a cold response from lawmakers. Some sat stony-faced during the speech, while others fidgeted with BlackBerrys.
The governor entered the packed chamber with nary a handshake for the hundreds of lawmakers and other officials who had assembled to hear him speak, and did not crack a single smile during his 30-minute address.
Lawmakers, Mr. Paterson charged, had too often bowed to the wishes of powerful special interests, feeding an “addiction to spending, power and approval” and plunging the state into economic catastrophe.
“No longer are we going to run New York like a payday loan operation,” the governor vowed.
Referring to industry and labor lobbyists in the chamber, he declared, “The moneyed interests — many are here today as guests — have got to understand that their days of influence in this town are numbered.”
Recognition Time
I am glad to see one governor stand up and unequivocally state there is an enormous problem regarding corruption and wasteful spending.
Typically the only time you hear speeches like that is before someone is elected. After election it is business as usual. President Obama is the classic example of "Yes we can" turned into "business as usual".
State by state, business as usual is going to stop. Everything needs to be on the table especially union salaries and defined public benefit pension plans.
Others will follow Paterson, not because they will be willing participants, but because the market will force their hand.
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the site