Meredith Whitney: 2011- Year of Defaults

[thriftyandboringinohio]

Re: Meredith Whitney: 2011- Year of Defaults

..do anything you want FEDs, as long as my lifestyle doesn't change...

That is a very good practical working definition of a successful economic outcome. It's wide appeal should be no surprise.

[vinoveri]

Re: Meredith Whitney: 2011- Year of Defaults

I can't fix the system on my own. Nobody can agree on what the problem is or what the solution is. How do we move forward?

I think many know what the problems are, from lobbying influence of the special interests (e..g, Wall Street, Healthcare, Education, Military etc), the regulatory capture of our goverment, the incestuous relationship between big gov and big business ... and these have been ongoing and entrenched for decades, and unfortunately, many of the people who recognize the status quo, benefit directly from and in fact thrive on it, so to expect change may be quixotic.

What has occurred over the past couple of years as a response to the financial crisis, however, has ripped the facade off (at least for me) and shown how deeply corrupt our government is, how the Federal Reserve system is in fact a cartel, operating in the cartel's best interest (e.g., protect the large banks at any costs and everyone's mutual cronies), and not in the interest of the United States as a constitutional republic or the common folk. Our government of elected representatives does nothing about it and continues to enable the fraud and theft.

I'm afraid that in order to move forward, people need to want to know the truth. The truth will indeed set us free, but we will know longer have the comfort of our gilded cage. Hey, if everyone's cage kept getting bigger and more plush in perpetuity, then maybe I would give the gov some credit, but of course, that's not what happens, e.g., instead income equality due to the riggest system widens and accelerates. There is no return on envy and ambition unless one gets more than the other fellow. The love of money is indeed the root of all evil.

So the way to move forward includes exposing the corruption and educating our fellows in what has and is happening. Of course this will likely get one labeled as a lunatic, or curmudgeon and won't get one invited to all the best cocktail parties, but I for one think sitting around the campfire telling ourselves its allright and that our leaders are really good people who are trying to do the "right thing" is a bit naive.

[vinoveri]

Re: Meredith Whitney: 2011- Year of Defaults

That is a very good practical working definition of a successful economic outcome. It's wide appeal should be no surprise.

I hope you are kidding, you are right?
Break any law,infringe any liberty you wish, as long as MY lifestyle can continue ..... I hope you recognize the implication here.

[vinoveri]

Re: Meredith Whitney: 2011- Year of Defaults

[

I love Miss Meredith and the only thing she is saying that doesn't quite wash with me is the idea that the FEDS (Federal Government and the Federal Reserve) won't find a way to bail out the states and municipalities. I would hardly think that bailing out AIG, McDonalds, and the Royal Bank of Scotland was politically okay but it happened. The shouldn't bail out these entities and it won't be close to fair but why would they stop now?

Exactly. There are no fiscal contraints of printing/borrowing unless and until Treasury bonds go up in earnest. Remember, Volcker didn't crush inflation until bonds were yielding 12+%. We've a long way to go. The "people" will not stop the out of control ponzi scheme, thieving, rule-of-law suspending government; only the markets can do that now.

Looks like we were right! Ponzi scheme indeed, not to mention, bye bye local control over anything anymore.


WASHINGTON — Rep. Gerald Connolly, D-Va., has introduced a bill that would extend the Build America Bond program through 2012 at subsidy rates of 32% in 2011 and 31% in 2012.
The program, which was authorized by the American Recovery and Reinvestment Act in early 2009, expired Dec. 31. It allowed state and local governments to issue taxable bonds and receive federal subsidy payments from the federal government equal to 35% of their interest costs.
The Obama administration had proposed making the program permanent.



http://www.bondbuyer.com/news/connol...ntraday_021111

[Slimprofits]

Re: Meredith Whitney: 2011- Year of Defaults

Is this Meredith's revenge?

Cali Munis have had a bad month and Buffet says 'look out for more dominoes to fall.'

http://www.bloomberg.com/news/2012-0...gma-lifts.html

[doom&gloom]

Buffet BAILS on Muni's

Ok, I know, it's ZH spinning a WSJ story, but this has some serious repercussions I imagine...

http://www.zerohedge.com/news/buffet...ure-ahead-time

*snip*


Just under two years ago, Meredith Whitney made a much maligned, if very vocal call, that hundreds of US municipalities will file for bankruptcy. She also put a timestamp on the call, which in retrospect was her downfall, because while she will ultimately proven 100% correct about the actual event, the fact that she was off temporally (making it seem like a trading call instead of a fundamental observation) merely had a dilutive impact of the statement. As a result she was initially taken seriously, causing a big hit to the muni market, only to be largely ignored subsequently even following several prominent California bankruptcies. This is all about to change as none other than Warren Buffett has slashed half of his entire municipal exposure, in what the WSJ has dubbed a "red flag" for the municipal-bond market. Perhaps another way of calling it is the second coming of Meredith Whitney's muni call, this time however from an institutionalized permabull.

In bad news for the bullish muni community, the Octogenarian of Omaha has terminated $8.25 billion worth of sold municipal insurance (or half of his total, the balance of which he is unable to terminate, or technically, novate, due to timing limitations), a move which the WSJ says "indicates that one of the world's savviest investors has doubts about the state of municipal finances. If so, the move could be a warning to investors who have purchased such debt. In canceling the contracts early, Mr. Buffett probably "doesn't want this exposure anymore and is getting out while he can," said Jeff Matthews, a hedge-fund manager who personally owns Berkshire shares."

In what is worse news for the bullish muni community, the fact that Buffett closed the position at substantial losses indicates that the once deified investor is willing to swallow his pride, and despite his massive balance sheet, refuses to wait out the expiration of the insurance, implying he sees not only major shockwaves ahead, but turbulence that is imminent (if only M-Dub had waited until now). What is worst, is that Buffett's bearish move comes at a very fragile time for the muni market: weeks after three consecutive bankruptcies shook California, and just as various other cities are contemplating strategies to impair bondholders (a la Greece and Belize) to avoid all out Chapter 9.

*snip*

Buffett is also quite aware that by selling half of his position, the resulting sell off as piggyback traders jump on the trade, will impair the balance of his positions. And still he has proceeded with the sale. All of which leads us to believe that not only did Buffett just join team Whitney, he has in fact doubled down.

[don]

Re: Buffet BAILS on Muni's

Consider Treasury Direct for short term rollovers.

http://www.treasurydirect.gov/indiv/...lp/default.htm

[charliebrown]

Re: Buffet BAILS on Muni's

what about VUSXX vanguard (treasury money market) or VFISX (vanguard short term treasury), I don't want to have to manage yet another account. Between IRA, Roths, husband, wife, and kids college the money is already very siloed. It makes it hard to manage.

MUB is not spiking, vanguard municipal money market fund no spiking or vanguard high yield muni fund. It might be time to take some chips off the table, but panic has not begun to set in yet ... Wake me up when there is blood in the streets. Wake me up when MUB goes sub 100.

[don]

Re: Buffet BAILS on Muni's

what about VUSXX vanguard (treasury money market) or VFISX (vanguard short term treasury), I don't want to have to manage yet another account. Between IRA, Roths, husband, wife, and kids college the money is already very siloed. It makes it hard to manage.

MUB is not spiking, vanguard municipal money market fund no spiking or vanguard high yield muni fund. It might be time to take some chips off the table, but panic has not begun to set in yet ... Wake me up when there is blood in the streets. Wake me up when MUB goes sub 100.

go third party at your own risk . . . the fundamental of fed treasuries is no return - near absolute capital retention. At least we hope . . . .

[rabot10]

Re: Meredith Whitney: 2011- Year of Defaults

Annual cost per local government employee $42,890
Mean annual income (all occupations) $43,600

http://www.bls.gov/oes/current/oes_nat.htm#00-0000

What if we didn't have to fire teachers, Police, and firefighters to save billions?
What if income taxes for those making over $250,000 per year were reset to 2000 levels?
Annual savings = $70 billion

Merry Christmas to all, especially to teachers, police, and firefighters who may find this to be their last Merry Christmas for some time.

Do you really think that making 250k is being part of the 1 percent? If so you have never made any real money. After paying taxes and living life how long would that take anyone to become a millionaire. Are you part of the group that believes that I didn’t create my business someone else did?

[charliebrown]

Re: Meredith Whitney: 2011- Year of Defaults

OK, .gov gets 70B in new revenue, where does the other 1.23T come from?

70B comes to about 3K per local/state/fed employee.
Most of the employee's are local. So should the fed's be taxing us to employee local employee's? Seems bass-akwards to me. Taxation without representation.

And I agree with the 250K. I have never made that much, but I assume raising kids in SF, or some other high cost area 250K might give you a nice life, but
not enough to punish and demonize you. In my working class neighborhood in the burbs, I think running a household on 70K would be pretty tight.
The biggest chunks being taxes, mortgage, and health care and transportation. That does not include college tuition.

Will that push the upper-middle class from the high cost areas?

After having my state income taxes go from 3% to 5% with no real deductions, now the local gvt wants more. Not many more tax increases before I have to move.

[jk]

Re: Meredith Whitney: 2011- Year of Defaults

Do you really think that making 250k is being part of the 1percent? If so you have never made any real money in your pathetic life!!!!!!!!After paying taxes and living life how long would take anyone to become a millionaire.What a joke you are!!!!!!!!!!! You must be part of the group that believesthat I didn’t create my business someone else did - fu/k you

a little rabid in your reaction, rabot? he didn't say execute you, confiscate all your goods, rape your wife and sell your children into slavery, he just said repeal the bush tax cuts for amounts earned over 250k. this would still leave taxes well below those that existed for long stretches in the past. maybe we should tone down the rhetoric a bit, huh?