State and city pension plans have been in a heap of trouble for years. What they need in order to be there in the future is a booming economy year after year and endlessly inflating asset bubbles. Otherwise, forget it. And even then, there's a $1.1 trillion hole.
Entries in Debtor Nation (102)
By Dennis Miller: Most state and local pension funds are woefully underfunded. California, Illinois, Ohio, New Jersey, and Texas together officially lack $431 billion; promised money that won’t be paid out. The real numbers may be far worse. But there is a "solution."
Belgium is known for its surprises. For example, it got by amazingly well for a couple of years without a national government, to the chagrin of a lot of people. Now that tiny country with a tiny economy is suddenly piling up a mountain of US Treasuries.
To give you a smile during these interesting times, when everything seems to be a bubble or manipulated or rigged against you.
This Chart Is A True Picture of The Bank Credit Bubble In America, Now Bigger Than The Last One (Which Blew Up)
For a while, rumor had it that banks weren’t lending, and that this was the reason the recovery has been so crummy. There was no demand for loans, and banks were too tight with their lending standards. Or so the story went.
The tiny country of Belgium with a GDP of $484 billion, a country that became famous to the chagrin of some people because it did just fine for a couple of years without a national government – well, it’s growing an enormous mountain of US Treasuries.
By Michael Lombardi, Profit Confidential: There are two important facts about our rising national debt that don’t get a lot of mainstream attention (and I certainly don’t hear politicians talking about them).
By David Stockman: The Fed prints $4 trillion and the national debt jumps $9 trillion in six years. We’re now in month 57 of the expansion, beyond the average 53 months – already on borrowed time. Now comes Professor Krugman proposing to “do something.”
How long before the dollar surrenders its status as world reserve currency and number-one payment currency to the Chinese yuan and to that other currency everyone loathes?
Rising household debt would be a hopeful sign that consumers are again living beyond their means, finally spending money they don’t have in a heroic effort to stimulate Wall Street, corporate earnings, and the Fed’s self-esteem. So we jubilate. We’ve waited for it too long.
Since the introduction of QE 3, honest-looking Fed chairman Bernanke told the Wall-Street media circus after each FOMC meeting that the money-printing binge in the coming month would expand the Fed’s balance sheet by $85 billion. A fact cited worldwide. And a big lie.
Central banks rule! We’ve seen it in 2013. They’ve accomplished the impossible: separating stock markets from the economies they’re based on. But in 2014, the US and China are trying to unwind these crazy policies – without taking down the entire global economy.
Treasuries have been skidding, and the 10-year yield hit the psycho-sound barrier of 3%. What happened last time this phenomenon occurred? Well, yields bounced off and fell – because the mayhem they'd triggered gave the Fed conniptions and caused it to back off.
Municipal bond investors, a conservative bunch eager to avoid rollercoasters and cliffhangers, are getting frazzled. Bankruptcies and the Fed’s taper cacophony are a toxic mix. So they’re bailing out of muni bond funds at record rate. Losses are mounting. And so are the fears.
Individual investors have a unique opportunity now to buy sewer bonds – yup, that’s where they belong – issued by a bankrupt county to pay off holders of defaulted sewer bonds who’ll get a fashionable haircut as part of the deal – a deal made in bond-bubble heaven.
In this episode of the Keiser Report, Max Keiser and Stacy Herbert slam the politics of debt. “Economics of Suicide” they call it. I’m in the second half. As always, high-octane, pungent, and funny! Warning: risk of whiplash.
By Michael Lombardi, Profit Confidential: Cities like Detroit tell their bondholders, “Sorry, we can’t pay you.” Budget deficits were out of control, they reached the breaking point, they filed for bankruptcy. Troubles of municipalities and cities are marching forward with full force.
By James Murray: Crows are considered the most intelligent birds. They can count to three. Anything over three is "many" to a crow. Humans are basically the same way. At some point, numbers get so big that they just become "many."
By Dennis Miller: In 2007, US Comptroller General David Walker pointed out on 60 Minutes that the US is suffering from a fiscal cancer. But politicians were unwilling to address it. Wall Street called him "Chicken Little." The national debt was $8.9 trillion. Now, it’s $17 trillion. And the cancer has metastasized to cities and states.
The US has abused its three phenomenal privileges – including the control of the only world currency – to put global financial stability at risk, “like a truck full of dynamite heading right toward us,” said the chairman of the International Advisory Board of the Universal Credit Rating Group. But a “new financial order” is forming. And there's a timeframe.