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Bill Gross strikes back at Meredith Whitney's latest dire forecast for municipal defaults,...

Bill Gross strikes back at Meredith Whitney's latest dire forecast for municipal defaults, doubting that many local government bankruptcies will occur. “Ultimately, municipal bankruptcies will be at a lower level... I don’t subscribe to the theory that there will be lots of them." He praises Illinois’ passage of higher tax rates to help close a $13B budget gap.
Comments (22)
  • sysin3
    , contributor
    Comments (61) | Send Message
     
    the state of Illinois spends too much, subsequently steals more money from its citizens ... and Bill Gross thinks that's a good thing.

     

    Asshole.
    12 Jan 2011, 06:10 PM Reply Like
  • Morg
    , contributor
    Comments (250) | Send Message
     
    It will be interesting to see how the populace and companies respond to the massive hike. My guess would be some of those who can pull up their stakes and leave will do so. In the end making the state finances worse instead of better.

     

    I have seen several very liberal sources try to say that higher taxes will actually boost economic output. The logic there seems convoluted to me.
    12 Jan 2011, 06:10 PM Reply Like
  • David White
    , contributor
    Comments (4042) | Send Message
     
    Bill Gross' experience will likely prove to be the truer read here. There may be severe troubles ahead, but we are likely to see European style bailouts rather than outright bankruptcies. The question will be what demands will be made at bailout times. CA, IL, etc. need serious budget reform. A bailout has to include that, or you are just kicking the can down the road. CA, IL, etc. have been doing that for far too long already.
    12 Jan 2011, 06:12 PM Reply Like
  • 7footMoose
    , contributor
    Comments (2266) | Send Message
     
    Illinois will be erecting gates at the borders to keep people and businesses from leaving if the new Legislature doesn't repeal this insane tax hike. If Bill Gross thinks that this is a good thing he needs a check up because he has been living in Hotel California too long.
    12 Jan 2011, 06:14 PM Reply Like
  • User 487974
    , contributor
    Comments (1105) | Send Message
     
    W.T.F.? Are you kidding me? Hey Bill your, eyes are brown due to the excess level of bullshit! You praise the incompetence of the politicians who just raised the taxes{67%} on the people of Illinois? Your just as disingenuous as the rat bastard pol's. Your credibility has been in the crapper since you started hanging out with the blowhards at C.N.B.C. Especially Leisman/ Insana.
    12 Jan 2011, 06:18 PM Reply Like
  • realitybiter
    , contributor
    Comments (219) | Send Message
     
    If you want some peak at how the populace might respond check out the latest video over at National Inflation Association: inflation.us/videos.html

     

    This is a process. The bureaucrats never saw it coming, have no idea how to fix it, and will continue to exhaust all solutions until the only workable solution remaining is exposed (smaller government). Nobody likes to diet.
    12 Jan 2011, 06:31 PM Reply Like
  • Papaswamp
    , contributor
    Comments (2178) | Send Message
     
    Guess Bill knows how the next bailout series will go.

     

    ..and in other news the Fed announces it's next round of POMO..time to front run...
    12 Jan 2011, 06:59 PM Reply Like
  • sysin3
    , contributor
    Comments (61) | Send Message
     
    Methinks that Billy is long munis and may be getting a bit nervous.
    12 Jan 2011, 07:37 PM Reply Like
  • 7footMoose
    , contributor
    Comments (2266) | Send Message
     
    You can bet he has a business interest in munis not going south.
    12 Jan 2011, 07:47 PM Reply Like
  • Pathfinder's
    , contributor
    Comments (117) | Send Message
     
    Illinois continues to spend 3-5% more than they take in, along with the nice Tax Increase taken by the Governor, he announced a increase in the budget and then they allowed him a 2% increase over the current budget, compounded each year.
    Plus, no mention on the excessive shortfall on Medicaid the state enjoys.

     

    So, we have a large Tax Increase on the individual and Business, and not one memtion of cutting spen ding and reducing the Budget Cost.

     

    I think we all know where this plan is headed.
    12 Jan 2011, 09:31 PM Reply Like
  • joe kelly
    , contributor
    Comments (1725) | Send Message
     
    Illinois is finally coming to grips that the financial mess left by Ryan and Blagojevich must be dealt with. It's going to be painful. Spending cuts alone weren't going to make a difference and putting off the needed revenue increase would have made it worse.

     

    How is a govenment that can't pay it's bills good for anyone?
    12 Jan 2011, 09:37 PM Reply Like
  • Pathfinder's
    , contributor
    Comments (117) | Send Message
     
    Well Joe, you make sure to let us know when Pat Quinn, Mike Madigan , and the body in Springfield ACTUALLY cut the state budget and enters into a plan to reorganize the under funded pension liability .
    We have not seen or heard of any current or future plan to address these financial problems. None.

     

    Remember, Quinn is another professional politician that has never worked in the private corporate world, and, was the Lieutenant Governor to old Rod Blagojevich,
    12 Jan 2011, 09:55 PM Reply Like
  • ebworthen
    , contributor
    Comments (2811) | Send Message
     
    Illinois "capped" spending by +2% per year...

     

    ....then they raised the income tax by 2% a year!!!

     

    In other words, they passed a 4% spending increase onto the taxpayer.

     

    As if individuals and corporations can't leave the State (or cheat on their taxes).

     

    Do you think they scratch their heads wondering why they have a deficit?
    12 Jan 2011, 11:20 PM Reply Like
  • HiSpeed
    , contributor
    Comments (1063) | Send Message
     
    If Bill Gross has an interest in various state/local government munis, how objective do think he's gonna be (especially to the public)?
    13 Jan 2011, 12:54 AM Reply Like
  • Morg
    , contributor
    Comments (250) | Send Message
     
    Here is an interesting bit from yahoo news on the subject. Its cites some good reasons why businesses may not leave, but also how other states are looking to benefit from the perceived error here.

     

    news.yahoo.com/s/ap/20...

     

    It's going to be an interesting experiment. One thing I will guarantee is that when the economy does improve you will not see this tax reduced back to where it was before.
    13 Jan 2011, 12:02 PM Reply Like
  • joe kelly
    , contributor
    Comments (1725) | Send Message
     
    Show me the opposition's plan Pathfinder.

     

    Everyone demands sacrifice as long as it's someone else sacrificing.
    13 Jan 2011, 04:07 PM Reply Like
  • 7footMoose
    , contributor
    Comments (2266) | Send Message
     
    There is no one correct answer to this problem. Everyone needs to sacrifice something, somewhere. This time there is no free ride at the local, state or national level. The only question remaining is how to share the pain.
    13 Jan 2011, 05:12 PM Reply Like
  • Pathfinder's
    , contributor
    Comments (117) | Send Message
     
    Joe:

     

    America is in the middle of a disinflation or devalue economy.
    Every smart business in Illinois have reduced their cost and cannot afford to build in a Individual and Corporate Tax Increase at this time in the recovery. Not without raising pricing and additional cost reduction (RIF)

     

    The Illinois State Government is too LARGE for the current economy, TOO LARGE, it cost too much money. They have to reduce the size of government. That means they have to reduce the employee size, in other words, lay off the excess workers. Just the same as every small and large business does during down business cycles.

     

    Plus, every School District in the Great Chicago Area, will be facing a shortfall in their pension programs, without a readdress to the current plans. Reduced Real Estate Value will not allow for massive tax increases in the next few years.
    Then, they will need to change the pension formula, get off the define benefit plan and go to a employee contribution plan. Private business did this in the mid 80's. Eliminate the full pension at 55 years of age. Business is working through their mid 60's, and beyond.

     

    These subjects do not appear to be on any agenda by Pat Quinn in dealing with the short falls in State Financial Short falls.

     

    Both Political Parties in Illinois are equal in their contribution to the financial shortfall and mismanagement of the Public Trust. Sooner or later Illinois will need to look in the mirror and admit to their problems. Sooner or later.
    13 Jan 2011, 06:37 PM Reply Like
  • joe kelly
    , contributor
    Comments (1725) | Send Message
     
    I agree that Illinois government is ridiculously bloated. I also agree that both sides are to blame. I have more contempt for Speaker Madigan than any of them though. It was obvious spending went nuts under Ryan and Mdigan did nothing to curtail it. Madigan wouldn't allow a tax hike to come to the floor under a democrat governor. The mess which could have been averted had Blagojevich just increased income tax from 3 to 3.5% his first year and scaled back some of Ryan's Illinois First. Blago is a crook and all our legislators were at the troft.

     

    I'm hijacking the thread. My apologies to the adminisrator.
    Suffice to say, a little pain a few years ago would have saved us a lot now. We have to do this now or it will get even more painful.
    14 Jan 2011, 05:50 PM Reply Like
  • 7footMoose
    , contributor
    Comments (2266) | Send Message
     
    Suffice to say, a little pain a few years ago would have saved us a lot now. We have to do this now or it will get even more painful.

     

    Truer words have never been spoken
    14 Jan 2011, 06:02 PM Reply Like
  • Pathfinder's
    , contributor
    Comments (117) | Send Message
     
    Joe:

     

    You only suggestion remains "INCREASE INCOME TAX ON BUSINESS AND INDIVIDUALS" No mention of Pension Cost or bloated Union employment rolls, or excessive spending programs cuts, .
    The State Government needs to cut cost and reduce employment rolls and rework Pension Liability.

     

    I think Joe is a State or Cook County employee, for Sure a Democrat that works in the current system ,
    15 Jan 2011, 07:15 PM Reply Like
  • joe kelly
    , contributor
    Comments (1725) | Send Message
     
    There are currently numerous businesses that put off their pension fund contributions also Pathfinder. This was irresponsible of them as well as governments.

     

    Would you sit quietly if your employer, or if you're self employed, your investment fund didn't get the contributions it was promised. If your investment firm used the money you put in for something else?

     

    I agree that there are literally thousands of government employees that are dead weight. I haven't gone through asny state budgets to check for what I'd consider waste yet. If you do and find some let me know and I'll debate the merits with you ar cosign a letter to your local paper or legislator demanding action.

     

    All I hear from you is hateful propaganda towards unions. America's middle class was strongest when unions were strongest.
    16 Jan 2011, 12:39 PM Reply Like
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