Bad economies in states to worsen: governors | Reuters

Bad economies in states to worsen: governors | Reuters: "The situation is fairly poor for a lot of states around the country. In fact, most states,' Vermont Governor Jim Douglas, who is chairman of the association, said at a press conference at its annual meeting.

'What we're finding out from a fiscal standpoint is that the worst is yet to come,' Douglas said.

In a survey conducted last week of 45 of the 50 states, the group found that states have $18.8 billion of budget gaps yet to be closed in fiscal 2010. This comes after they have already imposed measures to eliminate budget imbalances totaling $87 billion in the fiscal year, which for most started last summer.

In the budgets they are drafting for fiscal 2011, states foresee shortfalls of $53.6 billion and for fiscal 2012 $61.6 billion."
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And there is more of this "lagging indicator" stuff. This one's different, folks. This isn't cyclical. It's structural.

Banks in Calif., Ill., Fla., Texas are shut down - Yahoo! Finance

Banks in Calif., Ill., Fla., Texas are shut down - Yahoo! Finance: "WASHINGTON (AP) -- Regulators shut four banks from California to Florida on Friday, boosting to 20 the number of U.S. bank failures this year following the 140 closures last year in the worst financial climate in decades."
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And the carnage continues.

Does deal with feds encourage foreclosures?

Does deal with feds encourage foreclosures?: "A bank can make a bigger profit by foreclosing on a homeowner rather than modifying the mortgage, according to two California real estate entrepreneurs. They blame a sweetheart deal that a new bank negotiated with the Federal Deposit Insurance Corporation (FDIC).

The California men produced a video that has now gone viral on the internet, outlining a sweetheart deal for billionaire investors who came together to buy out troubled IndyMac Mortgage Services. The newly formed OneWest Bank haggled with the FDIC to buy out IndyMac's mortgages for 70 cents on the dollar, then convinced the feds to cover nearly all their losses with at least 80 cents on the dollar of the original loan values."
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The video link is here.

San Diego Reader | Home Owner Association Horror Stories

San Diego Reader | Home Owner Association Horror Stories: "In a way, the whole HOA is a sucker’s game set up by a collusion of developers and local governments. Unpaid HOA boards use HOA assessment fees to pay for what should be the municipality’s responsibility, such basics as roads, electricity, sewage, and water. Developers create high-profit, high-density housing and then hand it over, lock, stock, and all financial and legal responsibilities to these amateur boards not only to run what often amount to million-dollar businesses, but also to keep on paying property taxes to local government for the infrastructure services those authorities didn’t actually have to provide or keep up. No wonder cities love them just as much as developers. No wonder HOA-run condo complexes have mushroomed sixfold, from 7000 in California 20 years ago to about 43,000 today, housing around 10 million, maybe a quarter of the state’s entire population."
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The San Diego Reader's Bill Manson lays down the smack on HOAs. Quite a story. Thanks to Fred Pilot for this link.

Printing money, local currencies, communities and the economy - MSN Money

Printing money, local currencies, communities and the economy - MSN Money: "Last year, two Detroit tavern owners were sitting at the bar, sampling their beverages and bemoaning the local economy -- no one in the city had cash, and when they did, they spent it in the suburbs. Then the pair hit on a solution: Print their own money.

It is, after all, perfectly legal for anyone to issue currency, as long as it doesn't look too much like a U.S. dollar. Thus was born the Detroit cheer, a local scrip accepted by a handful of city businesses, including a pizzeria, an electrician and a doggy day care center."
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I think this story ends with people exchanging live pigs for baskets of apples.

Move Over China: Beijing Sells Whopping $34.2 Billion Treasuries In December As Japan Becomes Largest Official Holder Of US Debt | zero hedge

Move Over China: Beijing Sells Whopping $34.2 Billion Treasuries In December As Japan Becomes Largest Official Holder Of US Debt | zero hedge: "Gradually we are getting confirmation that Chinese 'posturing' about offloading US debt is all too real. The most recent TIC data confirmed the Treasury's greatest nightmare: China is now dumping US bonds. In December China sold $34.2 billion of debt ($38.8 billion in Bills sold offset by $4.6 billion in Bonds purchased), lowering its total holdings $755.4 billion, the lowest since February 2009, and for the first time in many years relinquishing the top US debt holder spot to Japan, which bought $11.5 billion (mostly in Bonds, selling $1.4 billion Bills) bringing its total to $768.8 billion."
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Frustrated Owner Bulldozes Home Ahead Of Foreclosure - Cincinnati News Story - WLWT Cincinnati

Frustrated Owner Bulldozes Home Ahead Of Foreclosure - Cincinnati News Story - WLWT Cincinnati: "The Moscow man used a bulldozer two weeks ago to level the home he'd built, and the sprawling country home is now rubble, buried under a coating of snow.

'As far as what the bank is going to get, I plan on giving them back what was on this hill exactly (as) it was,' Hoskins said. 'I brought it out of the ground and I plan on putting it back in the ground.'"
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Hey, fair is fair.

Las Vegas Mayor Goodman rejects Obama invitation - KTNV ABC,Channel 13,Las Vegas,Nevada,News,Weather,Sports,Entertainment,KTNV.com,Action News .:.

Las Vegas Mayor Goodman rejects Obama invitation - KTNV ABC,Channel 13,Las Vegas,Nevada,News,Weather,Sports,Entertainment,KTNV.com,Action News .:.: "Las Vegas, NV (KTNV) - Mayor Oscar Goodman has refused an invitation to meet with President Obama when he arrives in town on Thursday. Mayor Goodman called President Obama a slow learner after he told Americans not to blow money on a weekend in Las Vegas if they were saving to put their kids through college.

'I've got other things to do quite frankly for my constituents here in Las Vegas who rely on me to do the right thing as a mayor,' explained Mayor Goodman."
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No beer and apologies for Mayor Goodman...

National Debt, Budget Deficit Scary Forecast for Taxpayers: Obama to Sign Fiscal Reform, Economists Predict Cutbacks, Tax Increases - ABC News

National Debt, Budget Deficit Scary Forecast for Taxpayers: Obama to Sign Fiscal Reform, Economists Predict Cutbacks, Tax Increases - ABC News: "Over the past year alone, the amount the U.S. government owes its lenders has grown to more than half the country's entire economic output, or gross domestic product.

Even more alarming, experts say, is that those figures will climb to an unprecedented 200 percent of GDP by 2038 without a dramatic shift in course."
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The CID revolution was accelerated by measures that cut or capped property taxes. Imagine what kinds of institutional changes are in store for us. These gigantic deficits at all levels of government will force cuts in services that we think today are essential, and tax increases that we think nobody could afford.

States renege on local aid

States renege on local aid: "“For the last three recession cycles, it’s been common for states to reduce financial support for local governments during the recession, and once they come out of it, they restore most of what they’ve cut,” says Michael Pagano, dean of the College of Urban Planning and Public Affairs at the University of Illinois-Chicago. This time is different. Now local officials are wondering whether that money will ever come back."
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Wondering? Why are they wondering? The money isn't coming back.

Will San Diego go bankrupt?

voiceofsandiego.org | News. Investigation. Analysis. Conversation. Intelligence. - Explainer: Are Pensions Fair Game in Bankruptcy?: "Since last fall, talk of municipal bankruptcy has wormed its way back into public debate at the city of San Diego."
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The city has a $2.1 billion obligation to the public employee pension funds. There is a difference of opinion over whether they can make this go away by filing for municipal bankruptcy.

In Elkhart, Ind., Fear for the Day When Housing Aid Ends - NYTimes.com

In Elkhart, Ind., Fear for the Day When Housing Aid Ends - NYTimes.com: "ELKHART, Ind. — Over the next six months, the federal government plans to wind down many of its emergency programs for housing. Then it will become clear if the market can function on its own.

People here are pretty sure the answer will be no."
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Me, too. I'm pretty sure the answer will be NO in CAPS. On the bright side, though, there are great YouTube videos on how to pitch a tarp-tent and live off fried wood lice. So we do have options to that suburban lifestyle.

My Way News - Schools face big budget holes as stimulus runs out

My Way News - Schools face big budget holes as stimulus runs out: "SAN FRANCISCO (AP) - The nation's public schools are falling under severe financial stress as states slash education spending and drain federal stimulus money that staved off deep classroom cuts and widespread job losses.

School districts have already suffered big budget cuts since the recession began two years ago, but experts say the cash crunch will get a lot worse as states run out of stimulus dollars.

The result in many hard-hit districts: more teacher layoffs, larger class sizes, smaller paychecks, fewer electives and extracurricular activities, and decimated summer school programs.

The situation is particularly ugly in California, where school districts are preparing for mass layoffs and swelling class sizes as the state grapples with another massive budget shortfall."
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So how does the national economy recover? State and local governments and school districts across the nation are standing on swiss cheese.

World may not be warming, say scientists - Times Online

World may not be warming, say scientists - Times Online
“The temperature records cannot be relied on as indicators of global change,” said John Christy, professor of atmospheric science at the University of Alabama in Huntsville, a former lead author on the IPCC.
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So now the "deniers" include "a former lead author on the IPCC" and another scientist "who was invited by the panel to review its last report." And there are many others as well, who say that the temperature measurements upon which the global warming theory is based "are contaminated with surface effects from industrialization and data quality problems. These add up to a large warming bias."

I guess it is time for the global warming crowd to fire up their sarcasm machine, throw some ridicule bombs, and launch the ad hominem missles. Because, as Al Gore says, the debate is over. Except that it isn't.

Climategate U-turn: Astonishment as scientist at centre of global warming email row admits data not well organised | Mail Online

Climategate U-turn: Astonishment as scientist at centre of global warming email row admits data not well organised | Mail Online: "# Data for vital 'hockey stick graph' has gone missing
# There has been no global warming since 1995
# Warming periods have happened before - but NOT due to man-made changes"
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But other than that...

Desolate malls, empty offices may come soon - Real estate- msnbc.com

Desolate malls, empty offices may come soon - Real estate- msnbc.com: "Over the next several years, failed commercial real estate loans could litter American cities with empty stores and office complexes, cause hundreds of bank failures and weaken the economy, a watchdog report says.

Banks face up to $300 billion in losses on loans made for commercial property and development, according to a report released Thursday by the Congressional Oversight Panel."
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Nice to see somebody waking up to this situation. I've been predicting a commercial real estate meltdown, but maybe it will be a slow collapse. Thanks to Fred Pilot for this link.