Posts Tagged ‘Schwarzenegger’

Here’s Why California’s Budget Crisis Is Going To Be Much Worse Next Year

Here’s Why California’s Budget Crisis Is Going To Be Much Worse Next Year

california

Courtesy of Joe Weisenthal, Business Insider 

California recently closed its budget, but in January the state will need to begin working on its next one.

According to the LA Times, a $19 billion hole is already projected, and here’s the problem: The easy budget cuts and the easy tax hikes are already in the books.

The are other problems, too. The new governor, whoever that is, will be reluctant to waste political capital (Schwarzenegger had the benefit of being a lame duck) and fresh legislators will once again have to learn how the whole process works (California has term limits, meaning nobody ever sticks around long enough to know how it works).

Also, the public has unrealistic expectations:

In a survey of 1,000 Californians conducted in June by the Pew Center on the States and the Public Policy Institute of California, half of respondents believed state spending could be cut 20% or more with no impact on services. The report points out that the state would have to eliminate the equivalent of its entire prison system, all welfare programs and all transportation spending to save that much.

The authors went to Mike Genest, Schwarzenegger’s former budget director, for some perspective.

"Reality hasn’t caught up with the voting public," Genest told them. "Politicians have made it sound like there are other alternatives, like we can simply get rid of fraud, waste and abuse and [have] a spending freeze and … have the same kind of government we’ve always had. … That’s just not true."

Anyway, assuming a big GOP sweep in November in DC, there won’t be much help coming from the Feds. Barring another tax-revenue-creating bubble, this should be quite a horror show.

Now see the 11 states most likely to default >

Image: AP


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Mish Cheers The Labor Unions

Mish Cheers The Labor Unions; Schwarzenegger Begs Obama For Money, Seeks Permanent State Pay Cuts, Proposes Privatizing Prisons

Courtesy of Mish

California is imploding right before our eyes. However, you do not have to be there to see it, all you have to do is listen to the panic in governor Schwarzenegger’s voice.

Please consider California’s Schwarzenegger wants more federal money

California Governor Arnold Schwarzenegger on Wednesday vowed to pry more dollars from the federal government, which he said took more than it gave, but left details on how to close a $19.9 billion state budget gap until later this week.

In a state of the state speech, the governor said creating jobs was the top priority for his last year in office and proposed spending $500 million in worker training funded by part of the budget which is in surplus.

"We no longer can ignore what is owed to us, or what we are forced to spend on federal mandates," Schwarzenegger told the combined state Assembly and Senate, which must support any budget plan by a two-thirds majority — a bar that has forced months of acrimonious debate in previous years.

Democratic State Controller John Chiang said lawmakers have little time to lose if California’s government is to avoid the same kind of cash shortages that last year forced it to hand out IOUs to pay its bills.

"They’re certainly a year older and I hope a year wiser," Chiang told Reuters.

State Treasurer Bill Lockyer, also a Democrat, described Schwarzenegger’s speech as "essentially the same" as other set pieces by the governor — middle of the road and long on optimism, such as the promise to safeguard education.

"It’s a little hard to square with the fiscal realities," he said, adding that others had tried for years to claw back money from the federal government and the governor might rely too much on such help in the budget plan he releases this week.

Meanwhile, the state needs to sell bonds in coming months to avoid shutting down infrastructure projects, Lockyer said.

Schwarzenegger put the budget hole at $19.9 billion over 18 months, about a billion less than a recent report from the state’s budget watchdog. He blamed the federal government for possible increases because of new healthcare costs.

A new national healthcare policy would be a ‘disaster’ for California, he said.


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Showdown in California: Schwarzenegger vs. Democrats

Showdown in California: Schwarzenegger vs. Democrats

Courtesy of Mish
 
The showdown is on in California between the Democrat controlled legislature and governor Schwarzenegger. The battle shapes up like this: Democrats do not understand basic math and Schwarzenegger is not giving in. The end result is California seen missing budget deadline again.

Barring a miracle, California lawmakers will miss their June 15 deadline for passing a balanced budget — a staggering challenge with the state facing a $24.3 billion shortfall amid the worst drop in state revenues since the Great Depression.

Observers of the most populous U.S. state’s political scene laugh at the idea of a budget deal by Monday.

"It’s about as likely as me being named MVP of the Stanley Cup final," said Dan Schnur, director of the Unruh Institute of Politics at the University of Southern California.

Citing the state’s weak economy and double-digit unemployment rate, the movie star-turned politician has ruled out new taxes, which has raised his standing with the legislature’s unruly and anti-tax Republican minority.

Schwarzenegger also urged Democrats to ignore lobbying by their union allies against sharply lower spending levels to help balance the state’s books.

"Do they want to protect the workers that provide the services, or do they want to protect the people that get those services? The choice is up to them," he said.

His blunt talk came as the Service Employees International Union launched an advertising campaign against his budget plan, a threat to many of its 700,000 members in the state.

State Senate President Pro Tem Darrell Steinberg has said spending cuts are inevitable, but he opposes Schwarzenegger’s plan for scrapping state programs. Instead, he wants to tap reserves in the governor’s plan to maintain the programs.

Understanding Negative Numbers

Tapping "reserves" is idiotic because California has negative reserves of $24 billion. Do the Democrats or the unions understand the concept of negative numbers?

Unfortunately the answer is a resounding "No". Some might think this is a reason to keep the education budget intact. However, the odds that the legislature or unions sign up for much needed remedial math education classes is zero. Therefore, saving taxpayer money must take precedence over spending that will not go to where it is most needed.

Schwarzenegger Threatens To Shut Down Government

If a deal


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Zero Hedge

Chinese Soldiers Deployed Onto Street Of Hong Kong To "Help Clean Up"

Courtesy of ZeroHedge View original post here.

Dozens of People's Liberation Army (PLA) soldiers were spotted on the streets of Hong Kong's Kowloon Tong neighborhood on Saturday afternoon, cleaning up bricks and roadblocks left behind by pro-democracy protestors, according to broadcaster Radio Television Hong Kong (RTHK). 

Chinese People's Liberation Army (#PLA) soldiers in shorts and t-shirts...



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Phil's Favorites

Cities and states take up the battle for an open internet

 

Cities and states take up the battle for an open internet

Communities across the U.S. are taking network construction into their own hands. T.Dallas/Shutterstock.com

Courtesy of David Elliot Berman, University of Pennsylvania and Victor Pickard, University of Pennsylvania

Internet service providers like Comcast and Verizon are ...



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The Technical Traders

When Oil Collapses Below $40 What Happens? PART III

Courtesy of Technical Traders

This, the final section of this multi-part research article, will continue our exploration of the consequences that may result from our ADL predictive modeling system’s suggestion that Oil may continue to fall to levels below $40 over the next few months. 

In Part I and ...



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Biotech

Why telling people with diabetes to use Walmart insulin can be dangerous advice

Reminder: We are available to chat with Members, comments are found below each post.

 

Why telling people with diabetes to use Walmart insulin can be dangerous advice

A vial of insulin. Prices for the drug, crucial for those with diabetes, have soared in recent years. Oleksandr Nagaiets/Shutterstock.com

Courtesy of Jeffrey Bennett, Vanderbilt University

About 7.4 million people ...



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Insider Scoop

Glass House Group Appoints Graham Farrar As President

Courtesy of Benzinga

Glass House Group, a California-based cannabis and hemp company, earlier this week appointed Graham Farrar as president.

In his new role, Graham will oversee the company’s short and long-term business strategies, budgets and operations, and report up to Glass House Group CEO Kyle Kazan.

A long-time entrepreneur and an original team member of both Sonos (NASDAQ: SONO...



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Chart School

Dow Jones cycle update and are we there yet?

Courtesy of Read the Ticker

Today the Dow and the SP500 are making new all time highs. However all long and strong bull markets end on a new all time high. Today no one knows how many new all time highs are to go, maybe 1 or 100+ more to go, who knows! So are we there yet?

readtheticker.com combine market tools from Richard Wyckoff, Jim Hurst and William Gann to understand and forecast price action. In concept terms (in order), demand and supply, market cycles, and time to price analysis. 

Cycle are excellent to understand the wider picture, after all markets do not move in a straight line and bear markets do follow bull markets. 



CHART 1: The Dow Jones Industrial average with the 900 period cycle.

A) Red Cycle:...

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Digital Currencies

Is Bitcoin a Macro Asset?

 

Is Bitcoin a Macro Asset?

Courtesy of 

As part of Coindesk’s popup podcast series centered around today’s Invest conference, I answered a few questions for Nolan Bauerly about Bitcoin from a wealth management perspective. I decided in December of 2017 that investing directly into crypto currencies was unnecessary and not a good use of a portfolio’s allocation slots. I remain in this posture today but I am openminded about how this may change in the future.

You can listen to this short exchange below:

...



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Kimble Charting Solutions

Silver Testing This Support For The First Time In 8-Years!

Courtesy of Chris Kimble

Its been a good while since Silver bulls could say that it is testing support. Well, this week that can be said! Will this support test hold? Silver Bulls sure hope so!

This chart looks at Silver Futures over the past 10-years. Silver has spent the majority of the past 8-years inside of the pink shaded falling channel, as it has created lower highs and lower lows.

Silver broke above the top of this falling channel around 90-days ago at (1). It quickly rallied over 15%, before creating a large bearish reversal pattern, around 5-weeks after the bre...



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Lee's Free Thinking

Today's Fed POMO TOMO FOMC Alphabet Soup Unspin

Courtesy of Lee Adler

But make no mistake, if the Fed wants money rates to stay down by another quarter, it will need to imagineer even more money.

That’s on top of the $281 billion it has already imagineered into existence since addressing its “one-off” repo market emergency on September 17. This came via  “Temporary” Repo Man Operations money, and $70.6 billion in Permanent Open Market Operations (POMO) money.

By my calculations that averages out to $7.4 billion per business day. That works out to a monthly pace of $155 billion or so.

If they keep this up, it will be more than enough to absorb every penny of new Treasury supply. That supply had caused the system to run out of money in mid September.  This flood of paper had been inundati...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

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Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

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