Seeking Alpha

Mad Hedge Fund Trader » Comments » AKP

  • California's Gone Bust [View article]
    It's all over but the crying. Perhaps it was deliberate that AMC Channel featured an Arnold Schwarzenegger film festival this weekend. Was the gratuitous violence of Terminators, Judgment Day, and the End of the World intended to drive us all to the negotiating table (“speak to the hand”)? We now have a new currency in circulation, Golden State "script", which is thoughtfully being printed in green as I write this. Of course the banks haven’t said they will accept this past July 10, so many spent the July 4th weekend at Big Five Sporting Goods stockpiling ammo and drinking water (everyone here already owns guns), possibly inspired by the Arnold movies. Many schools have already cancelled summer school, so of course, the malls are full of jobless kids lounging around and smoking cigarettes, with nothing to do. Towns are going without fireworks celebrations, and worried citizens are bracing themselves for a complete cessation of state services by the fall. Obama has wisely turned a blind eye to all of this, leaving we non taxing big spenders to stew in our own manure. For more on this see my earlier piece . With everyone of all parties thoroughly disgusted with their leaders, I’m surprised that the grass roots campaign for a state initiative to dump the two thirds majority required to pass a budget hasn’t welled up yet. Does France still have that guillotine thing? Is it available for rent? Will they take California "script"?
    Jul 08 14:16 pm |Rating: +4 0 |Link to Comment
  • Do California IOUs Carry an Implicit Guarantee from the Federal Government? [View article]
    Not a chance. Implicent doesn't exist anymore. Perhaps it was deliberate that AMC Channel featured an Arnold Schwarzenegger film festival this weekend. Was the gratuitous violence of Terminators, Judgment Day, and the End of the World intended to drive us all to the negotiating table (“speak to the hand”)? We now have a new currency in circulation, Golden State script, which is thoughtfully being printed in green as I write this. Of course the banks haven’t said they will accept this past July 10, so many spent the July 4th weekend at Big Five Sporting Goods stockpiling ammo and drinking water (everyone here already owns guns), possibly inspired by the Arnold movies. Many schools have already cancelled summer school, so of course, the malls are full of jobless kids lounging around and smoking cigarettes, with nothing to do. Towns are going without fireworks celebrations, and worried citizens are bracing themselves for a complete cessation of state services by the fall. Obama has wisely turned a blind eye to all of this, leaving we non taxing big spenders to stew in our own manure. With everyone of all parties thoroughly disgusted with our leaders, I’m surprised that the grass roots campaign for a state initiative to dump the two thirds majority required to pass a budget, hasn’t welled up yet. Does France still have that guillotine thing? Is it available for rent?
    Jul 05 09:02 am |Rating: +4 -4 |Link to Comment
  • California Bonds Downgraded Again: How Low Can They Go? [View article]
    How about to "D"? As the California budget battle reaches white hot temperatures, Fitches has cut the rating on the state’s debt to A-, and placed it on “credit watch”, a warning of further downgrades. The move is a delayed recognition of reality, as is the rating agency industry’s practice. The legislature tried, but failed to pass $12 billion in budget cuts, which governor Arnold Schwarzenegger said he would veto anyway, because they didn’t meet the full $24 billion tab. In the package were increases in motor vehicle registration fees, $1.50 a pack in additional tobacco taxes, cancellation of health insurance for one million children, a production tax of 9.9% for in-state pumped crude oil, the firing of thousands of teachers, firefighters, policemen, and probation officers, and more smoke and mirrors accounting shenanigans that kick the can into the future. Some of the changes were only possible through a redefinition of the English language that turned “taxes” into “fees.”As California goes, so goes the nation, as many states will follow the Golden State into financial Armageddon. In a new era of soaring unemployment, restrained consumption, high savings, and crashing stock and property prices, states dependant on taxes on incomes, sales, capital gains, and property appraisals don’t do well. Make sure those muni bonds are insured. Why do I get the sickening feeling that I am watching a rerun of Thelma and Louis?
    Jun 28 16:08 pm |Rating: +2 -3 |Link to Comment
  • What Went Wrong with California, New York, and New Jersey? [View article]
    the system is clearly broken. As the California budget battle reaches white hot temperatures, Fitches has cut the rating on the state’s debt to A-, and placed it on “credit watch”, a warning of further downgrades. The move is a delayed recognition of reality, as is the rating agency industry’s practice. The legislature tried, but failed to pass $12 billion in budget cuts, which governor Arnold Schwarzenegger said he would veto anyway, because they didn’t meet the full $24 billion tab. In the package were increases in motor vehicle registration fees, $1.50 a pack in additional tobacco taxes, cancellation of health insurance for one million children, a production tax of 9.9% for in-state pumped crude oil, the firing of thousands of teachers, firefighters, policemen, and probation officers, and more smoke and mirrors accounting shenanigans that kick the can into the future. Some of the changes were only possible through a redefinition of the English language that turned “taxes” into “fees.”As California goes, so goes the nation, as many states will follow the Golden State into financial Armageddon. In a new era of soaring unemployment, restrained consumption, high savings, and crashing stock and property prices, states dependant on taxes on incomes, sales, capital gains, and property appraisals don’t do well. Make sure those muni bonds are insured. Why do I get the sickening feeling that I am watching a rerun of Thelma and Louis?
    Jun 28 16:07 pm |Rating: +6 -2 |Link to Comment
  • California's Default Is Certain [View article]
    Nothing is certain. As the California budget battle reaches white hot temperatures, Fitches has cut the rating on the state’s debt to A-, and placed it on “credit watch”, a warning of further downgrades. The move is a delayed recognition of reality, as is the rating agency industry’s practice. The legislature tried, but failed to pass $12 billion in budget cuts, which governor Arnold Schwarzenegger said he would veto anyway, because they didn’t meet the full $24 billion tab. In the package were increases in motor vehicle registration fees, $1.50 a pack in additional tobacco taxes, cancellation of health insurance for one million children, a production tax of 9.9% for in-state pumped crude oil, the firing of thousands of teachers, firefighters, policemen, and probation officers, and more smoke and mirrors accounting shenanigans that kick the can into the future. Some of the changes were only possible through a redefinition of the English language that turned “taxes” into “fees.”As California goes, so goes the nation, as many states will follow the Golden State into financial Armageddon. In a new era of soaring unemployment, restrained consumption, high savings, and crashing stock and property prices, states dependant on taxes on incomes, sales, capital gains, and property appraisals don’t do well. Make sure those muni bonds are insured. Why do I get the sickening feeling that I am watching a rerun of Thelma and Louis?
    Jun 28 15:59 pm |Rating: +10 -3 |Link to Comment
  • California's Permanent Crisis [View article]
    this can't go on forever. Sadly, once again, my once beloved but now spurned home state of California is threatening to commit suicide. The formerly Golden State officially runs out of cash in 50 days, and our body building governator, Arnold Schwarzenegger, refuses to borrow any more until the legislature delivers $24 billion in spending cuts. Standard & Poor’s has placed it on Credit Watch, and premiums for credit default swaps on the state’s debt have already spiked back up to 300 bp. I got a letter today from Robert Birgeneau, Chancellor of the University of California at Berkeley, where my son goes to school, telling me that his budget shortfall has just leapt from $67 million to $145 million, and that tuition is going up 9.3%, while staff wages will be cut by 8%, and financial aid will be chopped to the bone. Yikes! And this is the place we are counting on to deliver the scientists, engineers, and professionals who are supposed to keep us globally competitive. Pleas to Obama for a bailout have already been brushed aside, like a pesky fly. He rightly sees us as an alcoholic friend asking to buy him just one last drink. A default would be no joke, as California accounts for 15% of US GDP, and ranks as the world’s eighth largest economy. Few realize that the state is home to the country’s second highest per capita payers of tax revenue into Treasury coffers, after New York (Sarah Palin’s Alaska is the lowest). Hardly a day goes by without banner headlines about closing state parks, cancelling local sports programs, or freezing payments to mothers with dependent children. In fact, most state residents now prefer the Sacramento government to go bust in order to bring a speedier resolution. There is only one possible solution. A new governor holds a constitutional convention to reduce the vote to pass a budget from two thirds to 50%, or a statewide voter initiative accomplishes the same. Maybe ex Ebay CEO Meg Whitman, who will run for Arnold’s job next year, is up to the task?
    Jun 21 09:58 am |Rating: +1 -3 |Link to Comment
More on AKP by Mad Hedge Fund Trader
Comments by Ticker
AA, AAB, AAPL, AAUKY.PK, AAXJ, AB, ABAT, ABAT.OB, ABB, ABC, ABK, ABR, ABT, ABV, ABX, ACA, ACAS, ACH, ACI, ACM, ACN, ACOR, ACPW, ACRFF.PK, ACS, ACWI, ADBE, ADDYY.PK, ADE, ADI, ADM, ADP, ADRA, ADRE, ADRU, ADSK, ADZ, AEC, AEM, AES, AETUF.PK, AFFX, AFK, AGA, AGF, AGG, AGIGF.PK, AGNC, AGO, AGQ,
Mad Hedge Fund Trader is a
Top 50 Commentor
3654 comments
Rating: 2816 (8628 - 5812 )