Housing Slump Strains Budgets Of States, Cities

Time to cut back or to issue lots more bonds. It should be no surprise that they have planned their budget as if the good times never end. Lets hope China & Co will finance this forward looking budget planning... Havn´t heard the word "contained" for a long time..... I find it hard to believe that there will be any surpluses down the road. Especially if the economy will be in a recession ( I see no way the US can avoid it) . Click on the headline to read the entire story.

Zeit den Gürtel enger zu schnallen oder aber haufenweise neue Anleihen zu begeben. Es ist wohl überflüssig zu erwähnen das die Haushalte größtenteils so geplant waren als wenn die Blase in alle Ewigkeit weiter existieren würde. Bleibt zu hoffen das China & Co diese "Weitsicht" weiter finanzieren.....Habe zudem das Wort "contained" lange nicht mehr von Expertenseite vernommen. Das war noch vor 6-8 Wochen in aller Munde und wurde bei jeder Gelegenheit von allen Notenbänkern und Verantwortlichen geradezu penetrant in jedes Mirko diktiert . Das mußte einfach raus! ;-)..... Ich finde es zudem extrem unwahrscheinlich das in absehbarer Zeit irgendwelche Überschüsse ausgewiesen werden. Ganz besonders dann nicht wenn wie nicht mehr zu verhindern ie USA in die Rezession abgleiten. Klickt bitte auf die Überschrift um den kompletten Bericht zu lesen.

Tremors from the housing market's slump are straining the budgets of state and local governments from coast to coast, sending officials scrambling to plug gaps.

Rising defaults on subprime home loans are boosting the inventory of unsold homes and driving sale prices lower. That's cutting into housing-related revenues from building-permit fees, taxes on contracting and recording property transfers, and even sales taxes.

As a result, legislators in Florida, which was at the forefront of the housing boom, plan a special session this month to consider deep budget cuts to offset a projected $1.5 billion funding gap. California forecasts a shortfall of at least $5 billion in next year's budget. And Chicago faces a $217 million gap in its $5.6 billion budget for 2008.

Their budget problems could worsen when property-tax assessments catch up with the rapid decline in housing prices over the past year or so, something that hasn't yet happened in most parts of the country

Even though some data show home prices are falling sharply, homeowners in most parts of the nation have yet to see their property taxes decline. In states like California and Indiana, some counties already are seeing a record number of homeowners protesting their assessments. Residents are upset that their property taxes are still rising as market prices decline.

> This forecast reminds me of this famous chart "The Triumph Of Hope Over Experience...." or maybe they have hired some other experts like these Realtor-watchers ......

> Diese Prognose erinner mich doch sehr an diesen berüchtigten Chart "The Triumph Of Hope Over Experience...." oder aber die haben für ihre Planung diese Experten konsultiert......

Lower assessments would cut into property-tax receipts, a crucial source of funding for local governments but which rarely account for more than 10% of state-level tax collections

Reduced assessments are already causing budget problems in some areas. In Virginia's Fairfax County, where almost 60% of county general-fund revenue comes from real-estate taxes

Some of the states facing the largest shortfalls are those that had the biggest housing booms over the past few years. In Florida, the $1.5 billion shortfall -- $400 million for the last fiscal year and $1.1 billion for this year -- is nearly all due to the weak housing market

Sales-tax revenues have also declined, a side effect of the housing slump that has blindsided many states and municipalities. States are collecting less in sales tax -- which can account for as much as 15% to 20% of their total revenue

If we are Rome, Wall Street's our Coliseum

Somehow Jack Nicholson in "A Few Good Men" with his famous speech "You can´t handle the truth" comes to mind. 50 trillion hole and growing 3 to 4 trillion annually......Please click on the headline to read the entire piece.

Irgendwie erscheint mir bei diesem Thema die inzwischen berühmte Rede von Jack Nicolson aus "Eine Frage der Ehre" über die Wahrheit vor dem gesitigen Auge. Eine Lücke von 50 billion die jedes Jahr 3-4 billion anwächst. Leider kein Tippfehler...Klickt bitte auf die Überschrift um den kompletten Bericht zu lesen.

Maybe you don´t need to handle the truth if you believe in forecasts like this The Triumph Of Hope Over Experience

Aber evtl. verdrängt man die Wahrheit einfach am besten mit Prognosen wie diesen The Triumph Of Hope Over Experience

Should be great news for the Greenback down the road..... Thank god that the Fed is vigilant in fighting inflation ( see chart ) ...... ;-)

Das alles sollten zukünftig "tolle" Neuigkeiten für den US$ sein.... Wie gut das die Fed stets ein entschlossener Inflationsbekämpfer ist ( siehe Chart) ...... ;-)

Thanks to Bud Wood for the excellent Chart!

(Marketwatch) Comptroller General warns (again), we're 'bankrupting America'

What do Cassandra, "Chicken Little," the "Boy Who Cried Wolf" and David Walker, America's Comptroller General and head of the U.S. Government Accountability Office, all have in common?

Nobody pays attention to them!

Except for a short piece in London's Financial Times, Walker's warnings were generally ignored by the American press, by the public and even by the very Congress that hired him and has the power to do something, yet still refuses to heed his warnings. ......

>Here a not so depressing interview with the Comptroller himself with Colbert :-)

>Hier zur Abwechslung ein nicht so ganz deprimierendes Interview mit David M. Walker von Colbert :-)


got gold.....?

Going With The Flow? / Contrary Investor

Always a pleasure to read the brilliant stuff from Contrary Investor. This is only a small summary. Make sure you click on the headline to read the entire piece. Not a pretty picture.....

Immer wieder ein Genuß die treffenden Analysen von Contrary Investor zu lesen. Die nachfolfenden Charts sind nur ein kleiner Auszug. Kann jedem empfehlen den kompletten Report lesen (Überschrift klicken). Nicht sehr rosig.......

The first in this series is the very simple relationship between household cash and household liabilities. You may remember that our definition of household cash is as broad as can be. We include all household "banking products", per se, but also include all household holdings of bonds, inclusive of Treasuries, Agencies, corporates, muni's and mortgage backed paper. Implicitly, we are assuming bond holdings could be converted to cash at a moments notice. So what follows is simply total household cash less total household liabilities over the last six decades.

Next in the hit parade is this same household liability number now set against disposable personal income. In one sense, it's a measure of how much debt households have been able to support relative to their income at any point in time. And quite understandably, as interest rates in general have fallen since the early 1980's, households have been able to support ever larger total debt relative to their ongoing and growing income streams.

> Too bad that the US consumer can´t raise the debt limit like the government......

> Zu blöd das der Konsument nicht wie die US Regierung beliebig die Verschuldungsgrenze weiter nach oben schrauben kann...


Paulson: US should boost debt limit
Treasury Secretary Henry Paulson on Monday said the United States may be unable to pay its bills this fall unless Congress raises the government's borrowing authority, now capped at $8.965 trillion.

Congress has already boosted the statutory debt limit several times during President Bush's tenure. The last time Congress upped the government's borrowing authority was in March 2006 when it agreed to raise the debt ceiling by $781 billion.

In the past, Treasury has resorted to numerous accounting maneuvers to pay its bills while the government waited for Congress to expand its borrowing authority. Paulson argued against being forced to use such measures, saying they "would create unnecessary uncertainty for the financial markets and result in costs to the government." Such actions, he said. "should be reserved only for extraordinary circumstances, and should be avoided."

> And all this at times when Bush & co wants to make the public believe the deficit is improving......

WARNING: make sure you have no coffee in your mouth when you click on the link to see the chart for "Forecast US Budget Balance" :-)

> Und all das passiert zu Zeiten wo von Seiten der Regierung immer wieder zu hören ist das sich die Kassenlage entspannt......

WARNUNG: Ihr solltet besser keinen Kaffee im Mund haben wenn Ihr den nachfolgenden Chart "Forecast US Budget Balance" sehen werdet :-)

got Gold....?

David M. Walker, Comptroller General of the United States at Colbert / :-)

50 trillion hole and growing 3 to 4 trillion annually......

50 billionen lücke und ein anwachsen von 3 bis 4 billionen p.a....



got gold....?

the triumph of hope over experience....

i´m speechless.

when you want to read how the white house comes to this kind of forecast read "Fiscal frustrations" from the economist (click on headline).

looks more like something that should be released at fools day........ :-)

ich bin sprachlos.

wer lust hat sich die märchenstunde der kalkulation des weißen hauses durchzulesen bitte auf die überschrift klicken.

ich persönlich halte das für einen verfrühten aprilscherz..... :-)