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 _____? 

At Thanksgiving Fest, NY Bondholders And Cuomo See The Hand Writing On The NY Capital Walls

The words, Mene, Mene, Tekel, u-Pharsin, written by a God of Justice Disrupt the Albany Victory Celebration (King Cuomo, Silver and Sampson in their blue uniforms with their new committees behind them)
  *picture described in note #1 below

  CuomoTARP has obtained two translations for the handwriting "Mene, Mene, Tekel, u-Pharsin" on the walls of the NY Capital Buildings. It was the same Aramaic words the Babylonian King Belshazzar saw on the wall in Babylon around 539 B.C., *See historical note #2 below

        Translation #1: Mene, Mene, Tekel, u-Pharsin translates to Number, number, weigh, divide in two."   And the meaning is the same, for both King Andrew and King Belshazzar, "God has numbered your remaining days in power; your number is up; you've been weighed and found deficient; and your State will be divided up financially and given to its creditors."

 A Creditor: One of a tribe of savages dwelling beyond the Financial Straits and dreaded for their desolating incursions.
~ from Ambrose Bierce's Dictionary

Chinese creditors crack their whip on the Bernanke/Obama money printing scheme.  

Follow the economic reality trickle down below:
    China and Russia have decided to renounce the US dollar

    US Federal Reserve will slash its growth forecasts and predict higher unemployment


     Fears of Domino Effect Pervade Europe: Loss of Confidence Extends From Ireland to Spain, Portugal; Bond Spreads Widen as Euro Tumbles


     Belgium's debts to record levels in situation made worse by broken political system

    Now, see the world economic reality trickle down into NY on this blog: 
    another $6.8 Billion missing from the Cuomo Budget Plan.  

    NY Comptroller, DiNapoli, now promises safe returns of 7.5%  (or Madoff has a bridge for Sale)


    The Final Prophecy: from the Ghost of NY Yet To Come: the Trophy of Total Fiscal Failure. 
  

Now, the translation #2 for NY Bond Holders:

  Mene:  Count your bond values now
  Mene:  Count your bond values after the credit rate rises, inflation increases and bond desirability decreases  *See notes 3 and 4 below
  Tekel: Same as shekel or watch your money
  U-Pharsin;  Your bond values will be cut in half

The Words of the Prophet to bondholders:
  Sell now and not cry later

*note 1 The hand-writing upon the wall is a print etching and aquatint, hand-colored  by Js. Gillray  and shows  Napoleon, Josephine, French soldiers and women seated at feast with dishes "Bank of England," "St. James," "Tower of London," and "Roast Beef of old England." Napoleon looks in horror at hand of Jehovah pointing to words in sky: "Mene mene, tekel upharsin."  

note 2 from Daniel 5:25–28: "And this is the writing that was inscribed: mina, mina, shekel, half-mina. This is the interpretation of the matter: mina, God has numbered the days of your kingdom and brought it to an end; shekel, you have been weighed on the scales and found wanting; half-mina, your kingdom is divided and given to the Medes and Persians.
That very night King Belshazzar is slain, and Darius the Mede becomes King. (The end of the Babylonian Empire and the beginning of the Persian/Mede Empire)

note 3 short course with graphs showing inverse relationships of bond prices, interest rates, inflation

note 4 simpler explanation of bond value changes

Cuomo Loads Up His Band Wagon With Committees And the Fed Greases The Brakes For The Downhill Race With California

"Jump on the Cuomo Band Wagon and we'll beat California downhill to the Finish!"

With bluster and blandishment,  two large diverse transition committees were announced by Andrew Cuomo.   Then more committees, the Local Government Reform Committee and the Public Safety Committee, allowed more blandishing of more egos.  And Andrew blunted Al Sharpton's, and the NY Times' concerns and filled the committees with women and blacks.
Equal Opportunity responsibility now and Equal Opportunity blame later.
  
    "People who enjoy meetings should not be in charge of anything" ~Thomas Sowell

        Do the committee members believe their input matters?    Wake up.    Cuomo's M.O. requires a someone to switch the blame to when the inevitable failure comes.

Meetings are a symptom of bad organization. The fewer meetings the better. - Peter F. Drucker


      Questions for committee members: You'll have input?  Did it feel good to be appointed?   Are you also on the Cuomo Central Committee? Would Andrew switch blame to you?  Have you read Cuomo's Budget Makes New York The Favorite Over California For "First State Bankrupt" Prize? Do you believe Cuomo's and DiNapoli's lie about getting a 7.5% Safe return on pension investments?

      Hear into the future as Andrew says: "I picked the best people, all vetted by [insert committee member's name]   It's not my fault, the best and brightest, including [insert name]on my committee approved my choices."

The latest news: The Fed greases the bandwagon's brakes, "Federal Reserve will slash its growth forecasts and predict higher unemployment when it releases updated economic projections this week."

Imagine, willfully going on the Titanic, or joining a committee on the overloaded Cuomo Bandwagon with the Fed's greased brakes racing downhill.

Andrew Cuomo's Vision Of New York's New Justice System Appears In Charley Rangel's Tears

"The Government of the United States has been emphatically termed a government of laws, and not of men." Chief Justice Marshall writing in Marbury v. Madison, 5 U.S. (1 Cranch) 137 (1803)

      We can see NY's future from Andrew Cuomo's new vision of Justice in Charlie Rangel's theatrics this week in his "Ethics Trial."  Andrew Cuomo has said he'll not authorize the new Attorney General, Scheiderman, to investigate and prosecute criminally that special class of crooked NY politicians.
 
      Although, Charlie Rangel has admitted, "Rangel's solicitation letters asked for $30 million, or $6 million a year for five years," Andrew Cuomo failed to prosecute Rangel under NY Penal Law §100.05 Criminal solicitation in the fourth degree.  A person is guilty of criminal solicitation in the fourth degree when: 1. with intent that another person engage in conduct constituting a felony, he solicits, requests, commands, importunes or otherwise attempts to cause such other person to engage in such conduct.

      Although, Rangel has admitted, "Failure to pay taxes for 17 years," Andrew Cuomo failed to prosecute Rangel under NY Tax Law §1806. Criminal tax fraud in the first degree. A person commits criminal tax fraud in the first degree when he or she commits a tax fraud act or acts and, with the intent to evade any tax due under this chapter,or to defraud the state or any subdivision of the state, .. Criminal tax fraud in the first degree is a class B felony.

      Did you see the theatric pain that NY's ruling class's Rangel showed while wiping away the tears in his eyes.  Do you now appreciate Andrew's new vision for New York to replace criminal prosecution of crooked politicians with new ethics laws and ethics investigations?

      Thank you, Andrew for your vision that our ruling class needs special treatment, while the lowly we respond best to the full penal weight of the law.  "Tears punish our ruling class better than  jail."

      Andrew, thank you for your more just system where laws are relative to a person's stature and class and do not blindly treat all as equal before the law.    Justice Marshall was the past from 1803 and you are our future.

Cuomo's Budget Makes New York The Favorite Over California For "First State Bankrupt" Prize

        The race is on just as the Ghost of Arnold of California predicted.   California is in the lead, but with Andrew Cuomo driving the band wagon on this downhill leg and with his budget frauds shown on this blog, New York may make it first to the bottom win the First State Bankrupt Prize.

      Here's the latest news:  California Bond Woe Bodes Ill for States  with, "posting its sharpest selloff in nearly two years, as investors demand higher interest rates to buy paper issued by states, cities and counties to finance their operations."

     Look at all the factors for Cuomo winning the downhill race:

1. NY promises to earn 7.5% Safe Return on pension investments

2. Now, tax receipts are down (24.4 points) from manufacturing of non-government source. 

3. Of course, there's the missing $6.8 Billion in the budget.

4. There's the cost of Andrew's ethics instead of criminal prosecution of Albany's crooks. 

5.  There's Andrew's record as shown in the links in the index above.  Jerry Brown is no match for $1.2 trillion and $59 billion stolen.

The odds on favorite: Andrew and his band wagon will make it to the Bottom first and claim the Prize.

Andrew Cuomo Cheered As Swamp King While He Gives A Second Companion Piece Thank You

The Albany Swamp held their Rejoice Party this week and watched  new videos of the Swamp's vermin.

             The King Returns In Triumph


They watched the vermin, Charley Rangel, strut "his striped tie, his red pocket handkerchief bright and cheery enough to attract hummingbirds and on his finger, a glittering ring the size of a butter plate."   The Swamp roared with laughter, "ethics committees, ethics committees, so much better than a jail cage."

And the laughter continued as Andrew Cuomo said, "[I'm]hesitant to empower Eric Schneiderman to investigate public corruption at the attorney general’s office," and "would prefer a comprehensive change of the government through an ethics bill he hopes to pursue in the Legislature next year." And the swamp exploded, "An ethics probe, an ethics probe, just like the Rangel ethics probe."

Then Cuomo pulled out his CuomoTARP again and threw it over a stinking swamp pit saying,"I want to see what happens with the ethics reform with the Legislature, before I lift my CuomoTARP."    And the Swamp chorus roared: "Yeah, yeah, Andrew, Only after Godot returns, next year.

     The Swamp laughed as the new Attorney General, Scheiderman, crawled into the Swamp and threw a tantrum crying "that silver spoon feed brat, Andrew, has taken away my toys."

    Then Swamp King Andrew's, new Cleaning Up Albany Together video played where Andrew promises at 2:03 minutes to lift the CuomoTARP he's kept over NY corruption for the last four years.  When the video concluded, Andrew told the swamp, "Remember in 2008, when I promised in my 'CAP' (Cuomo's Amnesty Program) that 'Heads will role once the Amnesty Program ends,' well, I scored a  thousand percent (1000%), because after my last 4 years on the job, absolutely nothing happened."   And the Swamp chorus, "Lift the TARP; lift the TARP, Andrew,  but only after Godot returns next year.



     Then Andrew gave his Second Thank You (The Swamp Version of Cleaning Up Albany) Address to the faithful in the Swamp.

The text of his Second Thank You:

I'm King thanks to your money; your lies; your cheating; you did whatever to make me King.

My loyalty is to this swamp; regardless of what I say outside.

You know my record; the indictments not obtained; the cases settled without restitution or jail time.

You're my extended family. 

This Swamp has drainage in all 62 Counties where you knew I would protect you.

Ethics Boards and Commission Investigations weren't jail or restitution. 

My game, nothing happens until the legislature creates ethics probes;  then I blame them and wait another year for a Commission Investigation.

This Swamp has been around a long time and I'll keep it thriving.


Now, Laugh at an earlier swamp gathering; link with Ashley Dupre
Then, cry at a snare in the Swamp:  link

From Ponzi to Madoff to Hevesi to DiNapoli; New York Learns Anew About Bond Losses And A Phony Safe 7.5% Pension Return

      Madoff had promised safe returns of 10% before the economic recession began.

The SEC warns in its Ponzi Schemes – Frequently Asked Questions that Ponzi schemes share common characteristics:
          High investment returns with little or no risk
          Overly consistent returns.

     NY Comptroller, DiNapoli now promises safe returns of 7.5%, when the NY pension plan for the prior ten years, when higher safe returns were possible, never earned over 4%.  DiNapoli had claimed the NY Pension Funds were getting 8% expected returns for his first three and one half years in office.


     Now look at Greece, where, "Greek bond yields, a measure of investor confidence in the country's finances, rose on Monday, with the rate on 10-year paper up to 11.280 percent from 11.184 percent on Friday."
and "The Greek economy shrank 4.5 percent in the last 12 months, official data showed on Friday. Gross domestic product contracted by 1.1 percent in the third quarter."

      Now back to NY, where "The Federal Reserve Bank of New York reported its manufacturing activity index dropped to minus -11.1 points in November, from a positive +15.7 points in the previous month.  The Empire State Manufacturing Survey index is considered a bellwether of the manufacturing sector which has been a key strength in the economic recovery.  It was the first time the index fell below zero since July 2009, the month after the worst recession in decades was officially declared over.  The sharp 27-point decline surprised analysts, who had forecast on average a slip to a positive 11.7-point reading.  The new orders index plummeted to minus 24.4 points, from positive 12.9 points in October."

        Now, tax receipts are down (24.4 points) from manufacturing (a bellweather) of non-government sources; there's a 420% increase in the taxpayer share of pension costs; NY's borrowing costs for next year which earlier were predicted at $5.6 Billion with the TIC (True Interest Cost) of recent offering:  3.357% will quickly move up to paying the Greek rate of 11.28%.  Thus NY's borrowing costs will move up from $5.6 Billion to $18.8 Billion.  ($5.6 Billion times 11.28% divided by 3.357% = $18.8 Billion)


    Did you think public corruption would be rooted out?   Not yet as,  "Cuomo Hedges On Signing Over New Investigatory Powers To Schneiderman For Public Corruption Cases."

     But alas, as Ponzi and Madoff learned, economic reality (interest rates, revenues and spending) is a harsh task master, irregardless of your protectors. 
    Follow the money, Comptroller DiNapoli!   Oops, the money's disappeared!
    Hoping for the Tooth Fairy, an understanding Congress, iou's for bond holders or State workers?
    Quick sell your NY Bonds.  Greek bonds pay 11.28% guaranteed by the EU.   Who's guaranteeing NY Bonds?

Economic Laws, Pensions And Gravity Lead Andrew Cuomo To A Hard Fall

From Arithmetic for the Economically Challenged Idiots:

First, the rose colored government accounting system: 
     A report in the August issue of Governing, called New York State, the nationwide pension leader with Pension liability: $141 billion; Percent funded: 107.38%; Employees in Pension Plans: 1,343,524.
Compared to California's  Pension liability: $454 billion; Percent funded: 86.89%; Employees in Pension Plans: 1,995,169   But, Government Accounting Rules allow state pension plans to calculate their obligations using an assumed long-term yield of 8%.

Second, the law of economic reality, which like law of gravity cannot be ignored:

Economic reality:
     1. what safe investments earn 8% return in  our present economy?
     2. Pension plans -- including California, New York and Florida -- invest some of their pension funds in BP stock,
     3. Guess what?    NY Comptroller Di Napoli will reduce his hope to earn 8% percent a year to 7.5%.  Except for  Madoff, who guarantees a 7.5 percent rate of return?  Or 7 percent?  Or 6 percent?  No junk bonds allowed.   NY's real rate of return was less than 4% for ten years.
     4.  Comptroller Thomas DiNapoli proposes for the state government and local governments a  pension “amortization” (i.e., borrowing) plan where the 7.5% rate won’t necessarily affect annual pension fund contributions, because they can borrow their higher payments from the pension fund. Only the Government could imagine being able to use your credit card to charge your credit card payment.
     5. And it gets better, "after a decade in which the New York State pension fund’s annual return on assets averaged less than half its [8%]target rate, the fund will need to jack up its taxpayer-funded contribution rates next year, Comptroller Thomas DiNapoli announced today."  That's you, the taxpayer, paying a 42% rise in your share (11.5% to 16.3%)  See * below for changing the rate from 7.5% to 2.5% that would need a 420% increase in the taxpayer share.


 Third, a Cuomo cheerleader, the NY Times, agrees and had  "How to Cheat a Retirement Fund", an "approach that assumes, as economists generally do, that even corporate accounting standards in this area are too lenient, public pension underfunding is about $3.5 trillion, or one-quarter of gross domestic product."


  Fourth, from Arithmetic for the Economically Challenged Idiots,  here's the advice a parent must give a child who believes in a 7.5% safe return on investments, in maintaining the value of his BP stock investments, and asks whether you should make your credit card payment with your credit card.    The answer: Tough love; First, No; then a good Cry; then Stop Spending.

  Fifth,  Economic real world thinking: "Private pension plans must discount their liabilities based on a market rate—typically, a corporate or U.S. government bond rate—which is often much lower than the plans’ projected returns." 
*Return US Treasury: 10-MONTH NOTE 10-15-2010 2.475%
  There appears to be a large difference between 2.475% and 7.5% and DiNapoli's assumed drop from 8% to 7.5%.


  Finally, "New York’s state budget gap for 2011-12, the first year of the next gubernatorial administration, is now projected at nearly $8.2 billion[up from $5.4 predicted earlier]" and that doesn't include the corrections reported above. 
   Sorry, Andrew and Thomas (DiNapoli), using the laws of Economic Arithmetic or the law of gravity equals a hard fall.
You're Bankrupt, your game is over.

NY Debt Devaluation, Budget Collapse; Not If, But When

First,  from Arithmetic for the Economically Challenged Idiots:

Present Federal Debt : $13.7 Trillion
The Federal Reserve plans to print:  $0.6 Trillion
Net devaluation of US dollars: $0.6/$13.7 = 4.4%
If the Chinese don't want to lose money:  4.4% must be added to any NY interest rates 
 
Second, from Alan Greenspan:   Greenspan warns over weaker dollar   (see 4.4 % devaluation above)

Now, hear Timmy Geithner. "saying it [US Government] would never deliberately devalue its currency to boost exports."

Now think: Qui s'Excuse, s'Accuse  Or, Geitner, your excusing, accuses you.  Is the Government not deliberately devaluing, only undeliberately devaluing?

Quo Vadis, NY?  Quo Vadis, Cuomo?   Read the two earlier posts below

Andrew Cuomo Meets "The Ghost Of NY Yet To Come"; Was It Thomas Dewey?

Last night, Andrew was visited by the Ghost of NY Yet To Come.

 

      Last night, a Ghostly figure, who looked like a groom figurine with a mustache on a wedding cake, appeared to Andrew and showed him 2011 Newspaper clippings where all the NY Budget predictions in a prior post had come true.  Andrew then was carried to Seoul, South Korea, where he read the next day's headline in Financial Times, "China tees up G20 showdown with US."   Andrew heard China's Cui Tiankai say, "that the US plan for limiting current account surpluses and deficits to 4 per cent of gross domestic product harked back “to the days of planned economies”.

        Now the Ghost of NY Yet To Come carried Andrew into many varied homes of rich and not-so-rich NYer's.   Andrew saw each cringing at finding their tax- free NY municipal bonds had diminished in value because of the interest rate increase of  231% due to Obama/Federal Reserve printing money.   He saw the calculations were written on all their walls, 100% divided by 231% = 43% and saw they were crying at the new 57% ( 100% -43% = 57%) lower value of their tax-free bonds.  He saw all these angry tax-free bond holders packing up to leave NY, while cursing Andrew who destroyed their income protection.  "A pox on Andrew and them all. Where will Andrew get any money when we leave," they snickered. 

         Then, another ghostly figure appeared.   He heard that apparition say I'm the Ghost of Arnold of California Past.    And grinning, the ghost picked from the mantle top a large vessel inscribed Trophy of Total Fiscal Failure  and handed it to Andrew.  The Ghost of Arnold of California Past  then gave Andrew a  Bill in the the ghost's name for $40 million dollars a day borrowed to pay unemployment insurance, and said to Andrew, "this too will haunt you."
         The Ghost of Arnold of California  laughingly said, "I had only $80 billion in General Obligation Debt and you had $120 billion and a whole lot less people to spread it among."   The ghost kept laughing and said, "my State was described as the Lindsay Lohan of States, but yours will fare worse as the John Belushi of States."

       Andrew turned to the Ghost of NY Yet To Come with his mustache and said, "you look familiar."  The Ghost replied, "I was a former Governor and Prosecutor."   Andrew asked, "why do I dread you so?"  "I'm the harbinger of the your new tormentor, who will rise in my former role."  And the Ghost of NY Yet To Come carried Andrew back to his bed passing over endless angry crowds screaming, "He's impoverished us." .


       Andrew awoke sweating. A Pox? Was that Thomas Dewey? Was he just imagining that he saw pitchforks? Oh, no, there's the Trophy of Total Fiscal Failure.