California's Brown Plays His Cards While NY's Cuomo Stages More Theater

"a poor player, that struts and frets his hour upon the stage, And then is heard no more: it is a tale told by an idiot, full of sound and fury, signifying nothing." ~ Shakespeare

   Will Cuomo or Brown be first to bankruptcy?      "California faces a $28-billion budget shortfall equivalent to nearly a third of the general fund, which pays for most state programs, including schools, prisons, and health and social services."  The downhill race was stopped and a temporary table was placed between Brown and Cuomo and the game began.

And Brown placed eight of his cards on the table first.
1. Brown has already pledged to cut his own office budget by 25%.
2. Brown pledged not to raise taxes without voters' signoff.
3. Brown to take aim at several tax breaks and subsidies that have been fiercely guarded by the business lobby.
4. Brown will propose paring back the state's welfare program, reducing what doctors and healthcare providers are paid to care for the poor.
5. Brown is trimming funding for the University of California and California State University systems.
6. Brown warned school officials: "Fasten your seatbelt; it's going to be a rough ride.
7. Brown targeted a recent change to state business tax formulas that has saved corporate California roughly $1 billion.
8.  Brown wants to "Extend temporary taxes [to] erase up to $9.4 billion of that deficit."

   Meanwhile, Cuomo moves to more Albany Follies sideshow theatrics with, "New venue for Cuomo's State of State speech.",  where 2,500 seats are available to hear his oration.   Peter Abbate, a veteran Democratic assemblyman from Brooklyn said, "He can invite more of his friends and get a bigger applause. He'll stack the room."   "The new location gives Mr. Cuomo much greater control over the logistics and visuals—such as invitation lists, rehearsal access and camera locations—than he would have in the Assembly chamber."     Hopefully, he'll do better than his previous recorded message shown at a NY Albany Swampfest.

    The Albany children will recite a revised ditty to fit the revised Albany farce.

Oh, The grand Cuomo of New York,
He had ten 2.5 thousand committee men;
He marched them up to the top of the Capital hill Convention Center,
And he marched them down again.

And when they were up, they were up,
And when they were down, they were down,
And when they were only half-way up,
They were neither up nor down.

     Cuomo's only bluffed against Brown's cards #2 and #8 by promising not to raise taxes.  Cuomo has six other Brown cards to counter.   Raise your ante against Brown's, or fold up your Albany Sideshow and go bankrupt.

How States And Municipalities Could File For Bankruptcy

Debts are nowadays like children begot with pleasure, but brought forth in pain. ~Moliere

 Clearing up the State and Municipality Bankruptcy Reports:
          Latest News flash: "For state governments, though, there are no printing presses and no lines of credit. States can actually run out of money"  "In the previous two budget years, the federal government ended up bailing out struggling states. In fiscal years 2010 and 2011, states received a combined $127 billion in federal bailouts ... to cover more than a third of the total shortfall."  "Washington is in a tizzy over the ever-expanding federal debt."
       Earlier in the News: it's reported that a Michigan Town Is Left Pleading for Bankruptcy, but the State of Michigan isn't giving permission, because the state fears opening a floodgate for other municipalities.  That's not the case in New York where NY law allows bankruptcy filing by any municipality with State permission already granted under NY Local Finance Law §85.80 Authority for municipality or emergency financial control board to file petition under federal statute. A municipality or its emergency financial control board in addition to, or in lieu of, filing a petition under this title, or the city of New York or the New York state financial control board, may file any petition with any United States district court or court of bankruptcy under any provision of the laws of the United States, now or hereafter in effect, for the composition or adjustment of municipal indebtedness.

         Earlier News:  The fear of state insolvencies has spooked various bond fund managers, who fear management fee decreases, after a report that, "The U.S. government will face pressure to bail out struggling states in the next 12 months, said Meredith Whitney."    Meridith Whitney also said, "U.S. states won’t default,  Instead, they will cut aid to local governments, putting them at greater risk."  The new Congress is now under even greater restraints on borrowing.  And Cuomo has promised to cap local taxes and Cuomo can't now shift State expenses to local governments without them going bankrupt.

          Some people have faith in the claim some bondholders have over pledged revenue, but that is exactly the pledge that could be removed by a bankruptcy court.   The Conservative Heritage Foundation has, "Congress should consider a way for states to file for bankruptcy or its fiscal equivalent. While such a law would raise some serious federalism issues, as long as states are allowed to enter into bankruptcy voluntary, it could be constitutionally acceptable."

        Simple questions: 1. Will Congress borrow more money and increase the deficit to bailout States?

2. Will bond holders with pledged revenue still get paid first or even in total?  (See Finance Bazaar)

3. Will Congress pass a State Bankruptcy Chapter 10?

4. Will New York Bondholders get hurt?

Answers;  1,2 NO      3,4  YES

The Hand Writing Is On The Wall for New York State

Cuomo, Medicaid, And New York Budget Headed Nowhere

   Jesus knew their thoughts and said to them: "Any kingdom divided against itself will be ruined, and a house divided against itself will fall." ~ Luke 11:17

      How will Cuomo deal with, "Nearly half of the people on Cuomo's transition team and economic advisory council either are registered lobbyists themselves or work for organizations that lobby New York's state government ?   Particularly, the lobbyists for Medicaid providers?  

    "The flood of [NY] taxpayers' money that Medicaid has poured into the hands of providers has spawned a militant, aggressive health-care lobby that threatens and targets individual legislators, and that spends millions on advertising apparently designed to convince the public that any Medicaid cuts would result in patients dying in the hallways of hospitals."
      This [$38.7 billion] program costs the taxpayers over $1,300 a year for every man, woman and child in the state. Directly (through their own taxes) and indirectly (through taxes paid by businesses from which they buy goods and services), the average family of four in New York is paying over $5,000 a year to support the [NY] Medicaid program.

    Looking at NY spending, we have this budget item list which omits only the spending budgeted for the sacred cow of education.  Where do we make the cuts?  All data here is  from "Comptroller 2010 Report on Financial Condition of NY State." prepared in March 2009.
From the $38.7 billion  for Medicaid
   or the $4.2 billion spent for public welfare
   or the $4.8 billion spent for public safety
   or the $5 billion spent for transportation
   or the $0.8 billion spent for Environment and Recreation
   or the $0.2 billion spent for business regulation
   or the $6.4 billion spent for General government
   Or a total $60.1 billion

  As of 3/31/2010, 16% or $9.8 billion of NY's debt was issued as budget relief.  This number was corrected by DiNapoli in an Albany Follies Sideshow by adding another billion dollars to this budget relief in Dec. 2010, thus $10.8 billion is claimed as required.  Now from which of the above categories in the State Budget is Cuomo going to take this $10.8 billion from?   But, the fiscal reality is that the Albany Clowns are using a grossly low number when next year's budget needs to cut $22.1 billion.  

Read from the Public Policy Institute of New York State: Medicaid: Wreaking Havoc in Health Care and discover:
1. Our costs for Medicaid are well over twice the national average.
2. The two larger states, California and Texas, have almost three times our population—but combined, they spend only a bit more than New York on Medicaid.
3. New York's costs are so far out of line that the state sticks local governments with a substantial share—and that, in turn, is a major reason our property taxes are so high.   (And Cuomo promises to cap property taxes?)
4. New York's Medicaid  is "the mother of all mandates," in which Albany by fiat orders local governments to pay almost $3.7 billion a year of the cost.  This mandate hits taxpayers directly in their property taxes (except in New York City, which collects much of the cost through its own personal income tax)

    Then, what about the $1.2 billion needed to be refunded to the Federal Government?

      What will Cuomo do when "Nearly half of the people on Cuomo's transition team and economic advisory council either are registered lobbyists themselves or work for organizations that lobby New York's state government?   The Grand Army of the State of New York Transition and Economic Advisers will have one part working against the other.

 Expect lots of sound and fury signifying nothing, while Albany children recite new words to an old ditty:

Oh, The grand Cuomo of New York,
He had ten thousand committee men;
He marched them up to the top of the Capital hill,
And he marched them down again.

And when they were up, they were up,
And when they were down, they were down,
And when they were only half-way up,
They were neither up nor down.

 

Then, bankruptcy and sticking it to the "rich" bondholders

link ~ bankruptcy law

link ~ budget impossibility 

link ~ Hand writing on the wall for NY bondholders
link ~ Why bondholders will be greatest losers (NY Finance Bazaar) 

A Ron Paul Or A Cuomo And Fixing Your New York Tax Withholding Rates

 "A fool and his money are soon parted."

        Will New York follow California and give I.O.U.'s for tax refunds?   Should this cause you to correct your New York Income Tax Withholding rates?


   Here's a California I.O.U. called a"registered warrant"

But the big California banks didn't want to honor these California warrants. and they were illiquid for using directly for purchases, but the Cuomos would be traditional script which could be used for purchases and bill payments, if someone will take them.
                      A proposed "Cuomo"

$3                               NEW YORK TREASURY I.O.U.                               $3

Tender for all non- public debts if someone will take it

New York Comptroller, Thomas DiNapoli   In Cuomo and in New York State we trust

Backed by the Full Faith And Credit of New York State

$3                                 Three Dollars                                  $3

Nicknamed "the Cuomo"  NY State can print plenty of these to give to you.   Why a $3 dollar value?

       An alternate currency is in use in Mid-Michigan, such as a Ron Paul half troy ounce of silver or a gold Ron Paul

       Of course, the NY script (I.O.U. or the Cuomo) would be backed by the full faith and credit of Andrew Cuomo and NY State, but it could only be used if it was willingly taken, because of
Article I Section 10 of the Constitution: Section 10. No state shall enter into any treaty, alliance, or confederation; grant letters of marque and reprisal; coin money; emit bills of credit; make anything but gold and silver coin a tender in payment of debts; pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts, or grant any title of nobility, 


         Which would you take a Ron Paul half troy ounce of silver  or some Cuomos or some California "warrants"?

        While pondering, sell your New York bonds, change your NY Income Tax withholding so you don't get a refund.

        Merry Christmas

At that time Emperor Augustus ordered a census to be taken throughout the Roman Empire. 
~Luke 2:1

She gave birth to her first son, wrapped him in cloths and laid him in a manger -there was  no room for them in the inn. 
~Luke 2:7

There were some shepherds in that part of the country spending the night in the fields, taking care of their flocks
~ Luke 2:8

Suddenly a great army of angels appeared with the angel, singing praises to God:

"Glory to God in the highest heaven,

and peace on earth to those with whom he is pleased."

~Luke 2:13,14

May God bless you.

Hope And Change Offered Anew With Cuomo And His Same Old Cronies

Every decent man is ashamed of the government he lives under. ~H. L. Mencken

    The Albany Follies CHANGE with a new folly as, Gov.-elect Andrew Cuomo says he won't let taxes rise, that he'll get spending under control, once and for all.   "The ugly details: Since 2000, New York's population grew at a paltry 2.1 percent, versus 9.7 percent nationally. As a result, New York not only loses those two House seats, it'll also miss out on billions in federal cash," and with $12,769 debt per person in New York. and his credit card taken away.

News Flash: The HOPE and CHANGE of Green Jobs fizzle in New York even with large government subsidy as SpectraWatt plans shutdown.
 

     Have HOPE, some people learn from failure, Cuomo appointed his prior lackeys who helped him fail miserably. Steven Cohen, now Cuomo’s counselor and chief of staff, will be secretary to the governor.   Mylan Denerstein was named governor’s counsel, moving from executive deputy attorney general for social justice.  Former State Supreme Court Justice Leslie Leach, now executive deputy attorney general for the division of state counsel, will be appointments secretary.   Benjamin Lawsky, deputy counsel and special assistant to the attorney general, will be the governor’s chief of staff. He was general counsel to the Cuomo campaign. 

      Howard Glaser, director of state operations and senior policy adviser, was a senior manager at the U.S. Department of Housing and Urban Development in the Clinton administration, while Cuomo was HUD secretary, and presided over $59 billion dollars missing. 
Hold tight to your wallet with this new gang in town.

    Do you have HOPE in Andrew Cuomo to CHANGE a decades-old political mentality that seeks to soak the rich and handcuff business to please special-interest groups -- unions, lawyers, radical environmentalists?

     Is HOPE and CHANGE and Cuomo's collection of failed operatives a fool's delight?

  How many Cuomos ($3 note) will it take to CHANGE your mind and give you HOPE?

$3                NEW YORK TREASURY I.O.U.                   $3

Tender for all non- public debts if someone will take it

New York Comptroller, Thomas DiNapoli   In Cuomo and in New York State we trust

Backed by the Full Faith And Credit of New York State

$3                            Three Dollars                                $3

Nicknamed "the Cuomo"  NY State can print plenty of these to give to you.

No Whining, No Federal Bailout; You Made Your Bed Of Debt, Lie In It, New York

From Arithmetic for the Economically Challenged Idiots 


For the USA:
1. Total public debt outstanding Dec. 20 $13,868,461,000,000
2. nation's population on April 1 was 308,745,538 
3. USA debt per person $44,805
     And just today, "The U.S. government fell deeper into the red in fiscal 2010 with net liabilities swelling more than $2 trillion as commitments on government debt and federal benefits rose, a U.S. Treasury report showed on Tuesday."

    The federal Government can't bailout New York; it's sinking itself.  You're on your own, New York. 


    New York State reports State-funded debt was $60.5 billion or $3,105 per person and in 2009, NY was the second most indebted State behind California.

    BUT, this debt doesn't include the Pension liabilities from the present phony estimated safe return on pension investments of  7.5%, when the New York fund earned annualized returns of 3.1 percent for the 10 years ended in March 2009, and 1.1 percent over five years and New York state’s $132.6 billion pension fund is the nation’s third-largest. 

   So we need to correct the pension liabilities optimistically with a 3.1% return, or a pessimistically with a 1.1% return.  Doing the arithmetic optimistically, we have 7.5/3.1 x $132.6 billion = $321 billion,  which should be in pension fund, when only $132.6 billion is, or NY has net debt burden owed the pension fund of optimistically $321 billion - $132.6 billion = $188.3 billion or another $9,664 additional debt per person, which should be added to $3,105 per person above.   Making $12,769 debt per person as a better debt estimate in New York.   But now look at the 4.52 million people on Medicaid in NY (don't pay taxes) out of a NY population of 19,541,453  which raises the debt per taxpaying person and each of their dependents to $16,600 each.

The party's over; the hand writing is on the wall and on the paper; the accounting's been done; the prophet heard; the piper must be paid.

The words, Mene, Mene, Tekel, u-Pharsin, written by a God of Justice Disrupt the Albany Victory Celebration (King Cuomo, Paterson, Silver and Sampson in their blue uniforms with their new committees behind them)

Andrew Cuomo's Credit Card Will Be Taken Away

The last two NY Governors have proven Lord Acton right, "There is no worse heresy than the fact that the office sanctifies the holder of it."    Spitzer, Paterson desecrated their offices, and Cuomo will follow. 

      From Spitzer 's whores, we go to "Don't let the door hit you, Gov. Paterson"  The state’s top ethics watchdog slapped Gov. Paterson with a whopping $62,000 fine for accepting free World Series tickets from the New York Yankees"    "The moral and ethical tone of any organization is set at the top," Commission Chairman Michael Cherkasky said. "Unfortunately the Governor set a totally inappropriate tone by his dishonest and unethical conduct."

Was Paterson from Spitzer, a temporary upgrade?   How much lower can Cuomo's moral and ethical tone  go?

   With an ill wind at his back Andrew Cuomo will enter the governor's Mansion and will slip and fall into all of slimy messes the below:
1. Gov.-elect Andrew Cuomo may have forced the issue in his campaign by proposing a freeze for the state's nearly 200,000 employees. and said, "You have no economic future if New York is the tax capital of the nation,"  Instead, he wants to cap property tax increases and has warned of cuts in education and health care.

2. Build America Bonds Federal program ends in 2010 and although, "States and cities have embraced these taxable bonds to borrow money at what they assume are favorable interest rates. The federal government pays 35 percent of the interest costs on the bonds, a huge potential saving,''   BUT, New York shouldn't have borrowed money which it can't pay back.     And where, Andrew, will New York get this money in 2011?

3.  The municipal market that so scares people right now is one of heavy supply and uncertainty over the direction of mutual fund investment flows. What happens when the bond rate rises, Andrew?  
NY's borrowing costs will move up from $5.6 Billion to $18.8 Billion.


4. How about repaying the Unemployment Insurance: State Trust Fund Loans of $3,176,873,427.71 since January, 2009; that's $3.1 billion?

5.  States Slow to Face New Fiscal Reality

6. There's the $1.2 Billion to repay the Federal Government for Medicaid fraud which Cuomo failed to prosecute.


7. The absurd assumption of a 7.5% safe return on pension investments.

8. Andrew Cuomo claims he has a $9 billion dollar debt, when if he could add the above numbers he'll get $22.1 billion debt which is larger than his estimated $9 billion,  without even  counting the pension shortfall from the phony 7.5% safe return and the "Build America" funding losses.


9. From link: Ignoring the spending budgeted for the sacred cows of education and medicaid from where do you take the $22.1 billion dollars from the remaining budget categories below:
From the $4.2* billion spent for public welfare
   or the $4.8* billion spent for public safety
   or the $5*billion spent for transportation
   or the $0.8* billion spent for Environment and Recreation
   or the $0.2* billion spent for business regulation
   or the $6.4* billion spent for General government

  With a total of $21.4*billion

     Watch a replay of a typical post-adolescent crisis, "my credit card was declined because the evil credit card company has put a limit on my charges."    Watch when the silver spoon fed Andrew starts demanding that the federal government extend more credit.    Hold Andrew's hand and explain to him that there are limits on what can be borrowed?    Read to Andrew from France's AAA Grade at Risk as Rating Cuts Spread: Euro Credit  about how the parents (The EU or US Treasury) can be ruined by the spending of their children (European States in EU and States in the USA).

   Watch when our leader,  "the son of Mario" starts to whine and bang his spoon.   

"Democracy is the theory that the common people know what they want and deserve to get it good and hard." ~ Mencken

CuomoTARP Gives A Christmas Present To New York Bondholders

In God's schekels we trust, all others' schekels we weigh.  From a sign in an ancient Babylon Bazaar

  Trust in Cuomo's charisma?  CuomoTARP updates Financial data relevant to NY Finances and the value of New York State and New York Municipal Bonds. 
1.New York Unemployment rises to 8.3%.
2  Less employment means less taxes

   Trust in Obama/Geithner/Federal Reserve Bank?  Are you fooled by phony low inflation numbers, or do you know gas prices have risen since Obama took office from $1.80 per gallon to $3.31 per gallon (no link needed go to your local gas station).  This cost goes through to all other costs by raising the prices of any goods transported to stores.  
3. Food prices to increase 5% in December.
4. Treasuries rise and therefore NY Bond rates rise. 

  Did you miss the Handwriting on the Wall for NY Bondholders at Thanksgiving?
Mene:  Count your bond values now
 Mene:  Count your bond values after the credit rate rises, inflation increases and bond desirability decreases
  Tekel: Same as shekel or watch your money
   U-Pharsin;  Your bond values will be cut in half
Did you miss the Words of the Prophet to bondholders:
  Sell now and not cry later 

DO You think the Chinese stupid? 

What should you do with rising interest rates and holding bond funds or bonds?
   or what happens if federal rates rise on municipal or State bonds?

      Here's CuomoTARP's Christmas Gift to New York bondholders:

       Sell now and re-buy(?) after the NY interest rate doubles or goes even  higher; otherwise, you lose at least 50% of your bond fund's value.  

New York Cannot Fund Its Government's Debt

“Three groups spend other people's money: children, thieves, politicians. All three need supervision.”~ Armey

New York's budget cannot be sustained in the New Year.   Numerical data for NY State below is taken from "Comptroller 2010 Report on Financial Condition of NY State.*" prepared in March 2009.  In the State Fiscal Year 2009-2010 spending reached $126.9 billion*, or $6,493* per person according to NY Comptroller.  But 4.5* million NY residents receive Medicaid(which is free and whose recipients pay no taxes) or 23% of the total 19,541,453 NY residents, thus raising the taxpaying share of NY expenditures per tax-payer resident and their dependents to $6,493 divided by 0.76 = $8,543 per tax paying resident and all dependents on that tax paying resident ) 

      As of 3/31/2010, 16% or $9.8 billion* of NY's debt was issued as budget relief.  This number was corrected by DiNapoli in an Albany Follies Sideshow by adding another billion dollars to this budget relief in Dec. 2010, thus $10.8 billion is claimed as required, but not funded in 2010, for budget relief.  These chickens will come home to roost and greet Andrew Cuomo at the beginning of the New Year.  

       Moody's predicted federal treasury bonds will be downgraded if only $200 billion was added to federal debt, but Harry Reid added $1 trillion to the debt in pending Senate Bill today.   Guess, if Treasury securities are downgraded and rates raised, will States borrowing rates rise?   Usually, when federal interest rates rise, state rates rise at least proportionally or in the case of NY,CA,IL and MI even more.

       Now back to NY where, "NY was 2nd most indebted state behind California and had twice as much debt as the 3rd most indebted state.*"  
NY's State's funded debt is $60.5 billion*, or as of 3/212010 of $3,105* per NY person.

  item #1 Debt Service Expenditure in NY in 2010 was $5.6*billion in interest payments (due immediately, see link).

     Now what happens if debt service rises from 3.337%  by an additional 4% added due to federal policy and Chinese reaction   and Moody's devaluation of NY and federal debt as described above.

     Or that increases of  #1 above from $5.6* billion will be to more than a double $11.2 billion.
Now, where from will the governor and legislature take that additional $5.6 billion dollars?

Ignoring the spending budgeted for the sacred cows of education and medicaid from where do you take the $5.6 billion dollars from the remaining categories below:
From the $4.2* billion spent for public welfare
   or the $4.8* billion spent for public safety
   or the $5*billion spent for transportation
   or the $0.8* billion spent for Environment and Recreation
   or the $0.2* billion spent for business regulation
   or the $6.4* billion spent for General government

or $5.6* billion from their above total of $21.4*billion  or 26% from each of the above requiring dismissing (26%?) state work force in each of the above categories.

And if you think that 26% reduction is bad,  look at all the other additional cuts required when other factors are included

The handwriting is on the wall


New York must and will pay the piper

*all data from Comptroller 2010 Report on Financial Condition of NY State.

NY Bankruptcy, NY Bonds, NY Constitution, NY Pensions; The Resolution

Debt, n.  An ingenious substitute for the chain and whip of the slavedriver.  ~Ambrose Bierce

Neither a borrower, nor a lender be. ~Shakespeare

     We look to the NY Constitution to see why New York must chose bankruptcy if it's available under Federal Law.   Would the federal government refuse to loan or give NY Money, because "Federal loans to States would so increase federal debt so as to lower the federal bond ratings?"   Yes, because there'll be no love lost in the new Congress for bailing out New York's or other States' proliferate spending when the Congress has its own problems.  "The Treasury Department, in its regular budget monthly statement, said the government spent $150.4 billion more than it collected in the second month of fiscal 2011."  New York's deficit is pegged at $15.8 Billion , but if NY gets money, California, Illinois and Michigan will also want bailout money.
Simple question: Will Congress bailout States or create a new Bankruptcy Chapter?
 
        When New York State runs out of money, (technically bankrupt or bankrupt if the new Chapter 10 is adopted), the NY Constitution requires the Comptroller "shall set apart from the first revenues thereafter received ...a sum sufficient to pay such interest, installments of principal. ... at the suit of any holder of such bonds."   The applicable part of NY Constitution is copied below: (note word in red, "may" or it's up to the whim of a New York judge or a federal judge if the bondholder is not a resident of New York )


NY Constitution § 16. The legislature shall annually provide by appropriation for the payment of the interest upon and installments of principal of all debts or refunding debts .... If at any time the legislature shall fail to make any such appropriation, the comptroller shall set apart from the first revenues thereafter received, applicable to the general fund of the state, a sum sufficient to pay such interest, installments of principal, or contributions to such sinking fund, as the case may be,and shall so apply the moneys thus set apart. The comptroller may be required to set aside and apply such revenues as aforesaid, at the suit of any holder of such bonds.

    Supposedly NY Pension Benefits are protected in this article of NY Constitution § 7. ...membership in any pension or retirement system of the state or of a civil division thereof shall be a contractual relationship, the benefits of which shall not be diminished or impaired.

       No way out except for New York to limit its payments to NY bondholders in federal bankruptcy action.

A Moody's Downgrade Means Inevitable State Bankruptcies Need A New Bankruptcy Chapter 10 For States

"Take the bull by the horns"
          Federal debt for States' bailout will dry up after, "Moody's warned Monday that it could move a step closer to cutting the U.S. Aaa rating if President Obama's tax and unemployment benefit package becomes law."     There is no hope for NY or California or Illinois or Michigan except for a Federal Bailout or bankruptcy. But there's no Federal bankruptcy law applicable to the States. (See this link for more details)

      Since Congress will be reluctant to bailout States (where would it end?), we need a new Bankruptcy Chapter for State Bankruptcy to be called Chapter 10. Since States are sovereign entities and as such retain sovereign powers, Congress can simply make modifications to the present Chapter 9 for municipalities to create a United States Code Title 11 Bankruptcy Chapter 10 for States.

I've copied sections of the Federal Bankruptcy law for Chapter 9 and would remove text in blue and insert the red text.  Other parts of this Chapter 9 would remain unchanged and be renumbered from  §§901-906  to §§1001 to 1046

TITLE 11 CHAPTER 9 10
  CHAPTER 9  10—ADJUSTMENT OF DEBTS OF A MUNICIPALITY  STATE
SUBCHAPTER I—GENERAL PROVISIONS (§§901-904 1001-1004)
SUBCHAPTER II—ADMINISTRATION (§§921—930  1021-1030)
SUBCHAPTER III—THE PLAN (§§941—946  1041-1046)

903. 1003. Reservation of State power to control municipalities Sovereign power

This chapter does not limit or impair the power of a State to control, by legislation or otherwise, a municipality of or in such State in the exercise of the political or governmental powers of such municipality, including expenditures for such exercise, but— such State, a State law prescribing a method of composition of indebtedness of such municipality of such State may not bind any creditor that does not consent to such composition; and (2)a judgment entered under such a law may not bind a creditor that does not consent to such composition.

904. 1004. Limitation on jurisdiction and powers of court
Notwithstanding any power of the court, unless the debtor consents or the plan so provides, the court may not, by any stay, order, or decree, in the case or otherwise, interfere with—any of the political or governmental powers of the debtor State; the debtor’s use or enjoyment of any income-producing property; the sovereign immunity of such debtor State.

921. 1021. Petition and proceedings relating to petition 109(d) and 301 of this title, a case under this chapter concerning an unincorporated tax or special assessment district that does not have such district’s own officials is commenced by the filing under section of this title of a petition under this chapter by such district’s governing authority or the board or body having authority to levy taxes or assessments to meet the obligations of such district.  State.
(b)The chief judge of the court of appeals for the circuit embracing the district State in which the case is commenced shall designate the bankruptcy judge to conduct the case. After any objection to the petition, the court, after notice and a hearing, may dismiss the petition if the debtor did not file the petition in good faith or if the petition does not meet the requirements of this title.
If the petition is not dismissed under subsection (c) of this section, the court shall order relief under this chapter notwithstanding section (b)The court may not, on account of an appeal from an order for relief, delay any proceeding under this chapter in the case in which the appeal is being taken; nor shall any court order a stay of such proceeding pending such appeal. The reversal on appeal of a finding of jurisdiction does not affect the validity of any debt incurred that is authorized by the court under section (c)or (d)

927. 1027. Limitation on recourse
The holder of a claim payable solely from special revenues of the debtor State under applicable nonbankruptcy law shall not be treated as having recourse against the debtor on account of such claim pursuant to section (b) of this title.

Do, or do not. There is no 'try.' by Jedi Master Yoda

To be sent to various Congressmen, Senators, Moody's and others who may be interested in a non-bailout of States.

An Albany Demi-God Follows The Washington Demi-God To The Republican Side

       "Saint Andrew Conquers New York"
    While one demi-god, promising much, tripped and fell from his dais in Washington, another new demi-god, Saint Andrew, prepares to ascend to Governor in New York.  Sadly, Saint Andrew learned there were no palms to be spread in his path in Albany in January, but his committees were ready.  Like the Washington demi-god's children's chorus' "YES WE CAN", Albany children were reciting new words to an old ditty:

Oh, The grand Cuomo of New York,
He had ten thousand committee men;
He marched them up to the top of the Capital hill,
And he marched them down again.

And when they were up, they were up,
And when they were down, they were down,
And when they were only half-way up,
They were neither up nor down.

And so, the Cuomo committee men ended up where they began.

   Andrew announced his new staff, who, hopefully (oops, wrong word), have learned from their past failures. 
     Steven Cohen will be secretary to the governor.  Mr. Cohen was the top aide in running AG Cuomo's CAP program which was a total failure, as well as the sham prosecutions of the NY Comptroller, Hevesi.
     Howard Glaser, who served with the younger Cuomo at the federal Department of Housing and Urban Affairs, was named director of state operations.    Mr. Glaser helped making sure $59 billion dollars disappeared at HUD without an investigation as was called for by the Inspector General.

Now we read, "Cuomo is one of us Republicans."    Next, Cuomo will ask the Vatican for his statue.

And, the Vatican Museum will change "Janus"to the victor's name "Saint Andrew conquers NY"


Lots of hype and media fawning, lots of committees, a staff headed by lackey failures, a demi-god who moves to the center. 
When we ever learn; when will we ever learn.

        Alas, another demi-god destined to trip and fall, right after the Chinese firecracker is ignited and the debt bomb explodes in the New Year.

The New York Follies' Albany Band Wagon Races On the Road Downhill

In Albany, money grows on trees?
       The New York child was mistakenly left off this poster.  "Greece, Ireland, Spain, Portugal, California, Illinois, Los Angeles and Chicago are simply the poster children for what happens when elected officials engage in reckless and irresponsible management of their economies, their banking system or their respective government's public finances."

       Welcome to the La-la land of NY where, "Paterson announced a hard line hiring freeze in July, only to find out in October that 31,684 new employees had been added to the state payroll."
and where NY "state’s deficit has doubled to $15 billion since August," or taking into account interest rate changes $15.8 Billion (2011-2012 deficit)
       Then, Gov. Paterson doled out $17 million in pork-barrel spending after asking a special session of NY Legislature to close a $315 million dollar deficit which Comptroller DiNapoli claimed was really almost a billion dollars in a Albany Follies Sideshow.

       The blog apologizes for not identifying Gov. Paterson (also in a blue uniform to the right between two women)  at the Albany Thanksgiving Swamp Fest picture below, where the hand writing on the wall was seen.

The words, Mene, Mene, Tekel, u-Pharsin, written by a God of Justice Disrupt the Albany Thanksgiving Celebration (King Cuomo, Silver and Sampson in their blue uniforms with their new committees behind them)

Now a follow up of the handwriting on the wall from Arithmetic for the Economically Challenged Idiots,

California's budget deficit is  $25 Billion dollars
California's population is 36,961,664  or $6,763 per resident

NY's budget deficit is $15 billion dollars (see links above).
NY's population is 19,541,453 or $7,765 per resident

      What's ahead for New York is visible in California where, "California has been sending out IOUs instead of tax refunds, bills aren't being paid, workers have been furloughed two days a month without pay, and now Arnold is preparing to send out 20,000 pink slips—10 percent of the governor-controlled state headcount."

      Please send your comments to Andrew Cuomo on a proposed New York script that can be used for NY tax refunds and other purposes.

$3           NEW YORK TREASURY I.O.U.              $3

Tender for all non- public debts if someone will take it

New York Comptroller, Thomas DiNapoli   In Cuomo and in New York State we trust

Backed by the Full Faith And Credit of New York State

$3               Three Dollars                $3

Nicknamed "the Cuomo"  NY State can print plenty of these to give to you.

Andrew Cuomo's TARP Used To Protect Bank At SEC And Exorcising The False Hope Demon

Fool me once, shame on you; fool me twice, shame on me. Fool me repeatedly and you'll know I live in New York and I have a "need" to believe.

We offer a free exorcism of your false New York hope demon and any "need to believe in New York's Government or its bonds."

       In a recent report, the SEC Inspector General’s description suggests that [Andrew Cuomo's] tactics hamstrung an efficient and timely prosecution of Bank of America, or that Cuomo throw his Cuomo TARP to cover-up and protect at the SEC.

      What's new about this?   Nothing.  It's Andrew Cuomo's M.O..   Check these links on this blog.

1. Laugh and then cry as Cuomo's M.O., Silver, Sampson say one thing while they are working together towards fiscal disaster

2. See the pattern with Cuomo's M.O. where a criminal is not really punished nor makes adequate restitution.

3. See Cuomo M.O. again as he bungles a prosecution (an inadvertent error?) and executives escape

4. Watch while Cuomo allows $59 Billion to disappear while no one is prosecuted and no money returned

       Honestly, were you fooled by Andrew Cuomo in the above beginning quoted SEC Investigation when he "said he routinely obtained “multiples” of what the SEC obtained in its settlements?"   Do you believe Andrew Cuomo really gets more financial restitution and jail time?
      Now, Read: With Sheeple Fooled; Wolf One, Andrew Cuomo, Spares Under-Wolf Six, Hank Morris




Pick out Andrew among the sheep pattern?

Good, now try to see the pattern in links above, it's called Cuomo's M.O.

What's the Cuomo M.O. pattern?  Is it: missing money not recovered; criminals with no jail time; lots of sound and fury about cleaning out corruption and the result is _________?

Now, reality testing. Can Comptroller, DiNapoli, earn 7.5% safe return on NY Pension investments?  Would you buy a bridge from Bernie Madoff?

Did you see the always repeating pattern (the Cuomo M.O.)?

Now use Einstein's definition of Insanity: doing the same thing over and over again and expecting different results.

Will you sell your NY Bonds? (Y)(N)

If yes, your False Hope Demon was driven out, you're cured.  If no, repeat this exorcism.

The Albany Follies' Sideshow Continues Their Long Run With The New "Cuomo," $3 Script

Responsibility:  A detachable burden easily shifted to the shoulders of God, Fate, Fortune, Luck or one's neighbor.   ~Ambrose Bierce, The Devil's Dictionary


Highlights of the Albany Swamp's Finger Pointing Sideshow on Monday and Tuesday this week.  "Full of sound and fury and signifying nothing [done]"

1. Governor Paterson, playing  CYU or don't blame me next year when I'm gone, called the legislature into session on Monday to deal with a deficit in this year's budget which he estimates is $315 million.

2. Senator Sampson, playing CYU punts the budget cuts till January when the Republicans take over the NY Senate.

3. Comptroller, DiNapoli, claiming Paterson is underestimating the deficit for this year by a factor of three, or merely a billion dollars, while he forgets to include all the other factors such as his 7.5% Safe Return on pension investments.

4. Sheldon Silver dropping the ball in the Assembly hoping that after January, the Republican Senate can be blamed.

5.  Enter, Cuomo with his final soliloquy after meeting Assembly Democrats [saying],“For them to come back and do nothing is very distressing,” 

Show over; applaud please. Pretty please

6. With Public Finger Pointing sideshow ended, Cuomo and the other play actors from the sideshow's cast go back to Cuomo's committees, where, "Nearly half of the people on Cuomo's transition team and economic advisory council either are registered lobbyists themselves or work for organizations that lobby New York's state government and Assembly Speaker Sheldon Silver, Democratic Leader John Sampson, Republican Senate Leader Dean Skelos are all on Cuomo's committees.

Great show, Andrew, Silver and Sampson, too bad that:
  "Meetings are a symptom of bad organization. The fewer meetings the better" - Peter F. Drucker"

 

      Now with the sideshow ended, let's look to California for New York's next step in the new year.   "California is following the long tradition of bankrupt states turning to IOUs when the capital market looks less than inviting."

     Here's a sample of the proposed new $3 NY Script I.O.U. to be nicknamed "the Cuomo"  NY State can print plenty of these to give to you.

$3   NEW YORK TREASURY I.O.U.   $3

Tender for all non- public debts if someone will take it

New York Comptroller, Thomas DiNapoli   In Cuomo and in New York State we trust

Backed by the Full Faith And Credit of New York State

$3                Three Dollars                  $3

   Why was $3 picked as the value?   So that the "Cuomo" will trade above par with the dollar instead of below par like the historic trading value of City of Chicago I.O.U's at up to a 40% discount.

    The third world government of New York will offer an official exchange rate of one Cuomo = 3 U.S. Dollars.    Then, we can look to Illinois where, "Legislators left the capital this month without deciding how to pay 26 percent of the state budget.   And every major rating agency has downgraded the state."    See blog index above for details of NY budget debacle.

"When will the sheeple learn, when will they ever learn?"

Welcome to the Brave New New York World: 

 There's a great new local community business opportunity: a Exchange where Cuomos and dollars can be exchanged.

  If we can't borrow the money, Comptroller DiNapoli can use pension funds to buy NY debt.

  Thank God, we have Andrew's charisma to see us through.

Andrew Cuomo; A Drag Queen; And Dragging New York State Bankruptcy And NY Bond Devaluation Out Of The Closet

In God's schekels we trust, all others' schekels we weigh.  From a sign in an ancient Babylon Bazaar

   Welcome to the NY Finance Bazaar 

 This is your self check-out page where you weigh the future value of NY Bonds.   Will NY go bankrupt? You check which way the balance tips. 


     We'll take NY bondholders and NY residents to some of the stalls in the NY Finance Bazaar.

      Stall 1. The Supreme Court stall.  You may have thought bondholders were protected under US Law and Constitution?   But the US Supreme Court refused to follow the Constitution for Bondholders in these two recent offerings:

a. Supreme Court refused to hear a plea from bondholders and Indiana pension funds, representing $42.5 million of Chrysler's $6.9 billion in secured debt, who contended that their compensation was unfair at just 29 cents on every dollar of their bond value.
b .General Motors' (GM) bondholders asked to take 30 cents on the dollar in new bonds and GM shares in exchange for the their cash or their bonds lost 70% of their dollar value.

      Stall 2. The Illinois stall,  where, Illinois comptroller, Daniel W. Hynes, faces a figure in red of $5.01 billion.   “This is not some esoteric budget issue; we are not paying bills for absolutely essential services,” he says.  Illinois' dysfunctional political class refuses to pay the state’s bills of at least $12 billion (compare this to NY's $18 Billion projected deficit in NY).  There's a spectacularly underfunded Illinois pension system (compare this to NY's Comptroller claiming a unrealistic 7.5% Safe Pension Return on Investments),

      In re: Illinois; "States cannot go bankrupt, technically.  Legislators left the capital this month without deciding how to pay 26 percent of the state budget.  The governor proposes to borrow $3.5 billion to cover a year’s worth of pension payments, a step that would cost about $1 billion in interest."  We can see the future for NY in Illinois.

      Stall 3.  Historical bond trends are for sale:
"For two centuries, the bond market has reminded states that interest rates rise when they, like the  Greeks, the Spanish, and the Italians, spend many more dollars than they collect in tax revenues."
   If NY bond interest rates rise, the added yearly due interest will deplete NY's spending ability.

     Stall 4.  All the sackcloth and ashes you'll need:   Four states are likely to go bankrupt: California, New York, Illinois and Michigan

     Stall 5.  A Prophet is offering: Although there is no mechanism for states to go bankrupt, Congress could change that: This means we can expect a major push for federal funds to prop up insolvent state governments in 2011. This is where a legal mechanism for a State's bankruptcy needs to be created by Congress.

     Stall 6. Throw the ball in the right hole and win a prize:  Where will the new Republican House in the US Congress throw the ball?
 Hole a. Bailout four states to begin with,
or Hole b. Pass the bankruptcy law suggested in the article above in Stall 5?

     Stall 7. The Hope and More Hope stall with hallucinogenics for sale:  Do you believe Comptroller DiNapoli can get 7.5% Safe Return on NY pension investments?  (or Madoff has a bridge for Sale)

     Stall 8. Here are foreign bonds available with great yields:   The average yield for 10-year debt from Greece, Ireland, Portugal, Spain and Italy reached 7.57 percent today and that's for debt backed by Germany and not Geithner/Obama deficit spending.

     Stall 9.  Another Branch of the Hope and More Hope stall with stronger hallucinogenics for sale: Do you think NY's interest rate on bond offerings will stay at 3.357%?

     Stall 10. Strong espresso coffee served with tough love talk:  Knowing what the US Supreme Court did with GM bondholders, do you believe the Supreme Court will force NY to honor NY bonds at their full value or force NY State to honor pledges to pay certain bondholders before using the money for other purposes, or just offer pennies on the dollar value of existing NY bonds?  We can read the analysis of the NY Budget and Bond offering.

      Stall 11. This stall has snake-oil for sale and a "sexy" snake-charmer with a drag queen: 
The drag queen wasn't there, but her "sexiest male" snake-charmer, Andrew Cuomo, was.
"We like to imagine this is sort of how it happened with Andrew Cuomo. We've always imagined he was a, uh, dance man." 
  Well the dance man, Andrew, was still promising to charm at least one snake out of the Albany basket.
   Maybe, if we drop a schekel in his pot, at least one snake will come out of the basket.  Or maybe,  the basket is a closet and we ought check the sexual orientation of the snakes. (read the reports of Andrew's prior M.O. and snake-oil sales)

  Leaving the stink of the snake oil behind, we find the balance scale to check the weight of the schekels NY State is offering. 
Does the scale balance or tip?

      NY goes bankrupt?(Y)(N)

      NY Bondholders will lose over 50% of their bond value? (Y)(N)
      NY Pension Funds can earn 7.5% Safe return on their investments? (Y)(N) 
      Will Andrew Cuomo's "charm" fix NY Finances? (Y)(N)
      How will Fitch's, Moody's and Standard & Poor's finally valuate NY Bonds?

Junk?(Y)(N) or _____?