Defaulting banks - where will it stop?

[Peter Lemkin]

Sachs' Board of Directors, Executive officers and other top people all here in detail.
:eviltongue:

[Mark Stapleton]

Black's interview with Moyers is great...:

Bill Moyers most famous work,



http://mcadams.posc.mu.edu/russ/jfkinfo4...scv11c.htm



VI. THE PUBLICATION IN DALLAS NEWSPAPERS OF THE MOTORCADE ROUTE


One function Moyers performed, as a representative of the President, was to insist that the motorcade route be published. (168) Moyers coordinated the President's visit to Texas from Austin. He worked the Dallas situation by phone through his Dallas representative, Ms. Elizabeth Harris.(169) He had chosen Ms. Harris because she was a Dallas native, had been married to a prominent Dallas person, and had been an associate of Moyers in the Peace Corps. (170)

Moyers stated that the only "major decision" he made with respect to Dallas was that: ... some 24 hours before the President arrived, there was a dispute as to whether or not to print in the newspapers the route, Betty Harris called me... and said they were not going to print the route of the ... [motorcade] procession and I said, "Oh, yes they are. He's not coming down here to hide. He's coming down here to get a public reaction, and the decision is to print the route of the President's procession," and I don't know what Betty did after that, but the route was printed. (171) Moyers later amended his recollection of when this decision occurred. I think it was the second night before his--preceding his arrival... and we were printing the route in the other papers, and I couldn't see why an exception should be made in Dallas. (172)

Moyers was in contact with the Secret Service at this time, and was aware of the security implications of printing the motorcade route. He recalled asking the Secret Service agent stationed with him Austin, whom Moyers characterized as having been "in charge of Dallas trip," whether there was any reason why the route should be printed. Moyers believed the agent agreed with him that the route should be published. (173)

[Jan Klimkowski]

Plenty of lynchworthy material out there thanks to Andrew Cuomo.

If Paulson & Bernanke had any honour, they would repent of their sins, then slit their stomachs open in an act of ritual seppuku.

Chances of happening? Zero.

Karl Denninger's account hits the nail on the head:

Again: Government Lawlessness

Yesterday afternoon, after I published "Paulson and Bernanke: Indictment Time?" in which I said:

Your first obligation isn't to your regulator, it is your fiduciary responsibility to your share and bondholders.

If your regulator decides to remove you from office as a consequence, they do. That doesn't change a thing; your personal interests cannot override your responsibilities.

As the CEO of a public firm you don't work for the government, whether you think you're some "left arm adjunct" or not. You work for the holders of your stock and debt - period. On this matter the law is clear, and the government, even post-TARP, had a minority stake.

As such they lack standing to tell you to shut up when your obligation to disclose is a matter of black-letter law.

The finger pointing got really good.

First, Paulson was reported to have taken his marching orders from Ben Bernanke. Then he "recanted" that with the following:

Hank Paulson has recanted on what he told Andrew Cuomo, which was that Ben Bernanke asked him to threaten to oust Ken Lewis and the Bank of America board if Lewis decided not to go forward with the Merrill deal.

Paulson says his words were his own and that Bernanke did not ask him to convey a specific message to Lewis, CNBC says.

Even later the story changed again!

Both Paulson and Federal Reserve Chairman Ben S. Bernanke said they hadn’t advised Lewis to conceal Merrill’s mounting losses from his shareholders.

“Questions of Bank of America’s disclosures were left up to Bank of America,” Paulson said in a statement e-mailed to Bloomberg by Michele Davis of the Brunswick Group, a corporate communications company.

What we have here are rats scurrying around having realized that they ate the poison. See, as was reported on Bloomberg yesterday and which I identified immediately, this is black-letter law:

“Everyone involved knew that was a clear violation, that’s material non-public information, so basically we just closed the rule book during the crisis and said we don’t care, we need to keep the lights on, and we’ll deal with that manana,” Sorrentino said. “Logic went out the window and they were just acting out of fear,” he said. It was “completely panic mode.”

Now "tomorrow" has come.

President Obama (and others, including Barney Frank) have repeatedly tried to deflect criticism not only here but also when it comes to other matters in the Bush Administration (and those before it) by saying "we have to move on."

Mr. President, no. We will not "move onward" and forget.

This has nothing to do with partisan politics and it is not aimed at either administration - there is plenty here to go around.

This is about the rule of law - black-letter law. "Moving on" is exactly how people in "high places" get to commit felonies - serious felonies - without consequence, even when they screw millions of Americans out of hundreds of billions or even trillions of dollars.

Americans are tired of being financially raped, and with good reason. This "economic mess" is not an accident or "act of God"; it is an act of man - intentional and willful malfeasance and misfeasance intended to strip off "profits" for individuals in the banking system by impoverishing ordinary Americans.

Second, let's talk about what I believe Mr. Cuomo (and the shareholders of Bank America) need to be looking at here: An active conspiracy between Treasury and The Fed - a conspiracy that there is no evidence has ended:

Lewis testified that he asked Bernanke to “put something in writing” regarding the U.S. government’s plan to support Bank of America’s acquisition in view of Merrill’s mounting losses.

After Bernanke said he would consider the idea, Paulson called Lewis. He said, according to Lewis, “First it would be so watered down, it wouldn’t be as strong as what we were going to say to you verbally, and secondly, this would be a disclosable event and we do not want a disclosable event.”

Got it?

This is in testimony (according to Bloomberg) - that means, under oath.

What Lewis has alleged, assuming that these reports are correct, is that he had a conversation with Bernanke in which he asked for something on paper from The Fed, who is the plenary regulator of all federally-chartered banks.

Ben told him he'd consider it.

Then Paulson called him (who was not involved in the original conversation) and explicitly stated that "we" do not want a disclosable event.

Assuming this testimony is a correct rendition of what happened we have:

1. Two or more people who were conspiring together.
2. Who each individually and collectively knew what they were doing required disclosure under the law.
3. Who conspired together to block that disclosure and allegedly issued threats to Mr. Lewis to achieve that goal.

Bloomberg spent most of yesterday on this, as they should. CNBS, on the other hand, tried like hell to bury this story, when it is the seminal story of the bank bailouts and the tip of the iceberg.

IF the testimony is as reported then someone has broken a series of laws and I'm willing to bet that it does not stop here.

Let's outline the possibilities. There are only two:

* Ken Lewis lied in his testimony. That is, he committed perjury and must be so charged. He also committed securities fraud, acting alone; the shareholders should sue him to Mars and the SEC should bring both civil and criminal felony complaints.
* Ken Lewis told the truth. Ben Bernanke and Hank Paulson, both federal officials, grossly exceeded their authorities, possibly exposing them personally to liability, both civil and criminal. "Acting under color of authority of law" is an extremely serious matter and the predicate act may rise to extortion; since they acted in concert one must ask if racketeering may have taken place (in a legal context.) In addition Ken Lewis is an active participant as he cooperated with this unlawful act as demanded and he must also be charged.

We need Grand Juries and we need them now. Not only in the Bank America/Merrill deal, but also in the Bank America/Countrywide deal, in the Bear Stearns/JP Morgan deal and more.

We the people deserve and must have the truth.

Just as importantly we must have the truth for the integrity of our capital markets. That fluttering sound you hear is foreign capital departing, and if we are not careful since this extends to the highest level of our Treasury and Banking System (The Fed) the risk is very real that we will incite a run on Treasury Securities, which would lead to an immediate collapse of federal funding and the failure of our political and economic system.

That is precisely the sort of nightmare scenario that I have been sounding the warning horn on for nearly two years. When government becomes the felon instead of the cop there is a very real possibility that both domestic and international support for your government will be lost. When you require that support in order to survive as a consequence of your heavy borrowing demands you are at severe risk of both economic and political collapse.

This is far more serious than Watergate and it requires immediate attention. If Cuomo is the only man with the balls for the job, then Godspeed Mr. Cuomo, and I hope you haven't patronized any high-dollar hookers at any time in your life, as I'm quite certain your political opponents are looking into it at this very moment.

http://market-ticker.org/archives/984-Ag...sness.html

[Jan Klimkowski]

As a little mental exercise, I just read the chronology in the previous post and replaced Bernanke & Paulson with the Fed and the Treasury.

What do you think I should replace "US" with in the Reuters wire below?

:bath:

U.S. may remove Citi's Pandit: report


(Reuters) - U.S. regulators who are concluding "stress tests" on banks may remove Citigroup Inc (C.N) chief executive Vikram Pandit, the New York Post reported, citing sources it did not identify further.

The regulators may have to take such a step to show the government is taking as strong a stand on banks as it did with General Motors Corp (GM.N) when it removed Rick Wagoner, the paper said.

Citigroup finance director Ned Kelly told the paper in an interview: "Replacing (Pandit) would be dramatically destabilizing both for Citi and the system."

"Our recent quarterly results reveal the underlying strength of the franchise and Vikram Pandit's strategy at work to restore Citi to profitability," a Citigroup spokeswoman told the paper.

A Citigroup spokesman in Hong Kong declined to comment on the report.

U.S. Treasury Secretary Timothy Geithner's visit to Citigroup's offices a week and a half ago was simply to conduct a check-up on the bank, the paper said, citing people familiar with the meeting.

(Reporting by Ajay Kamalakaran in Bangalore; Editing by Dan Lalor)

http://uk.reuters.com/article/companyNew...VY20090424

[Jan Klimkowski]

The ideal interest rate for the US economy in current conditions would be minus 5 per cent, according to internal analysis prepared for the Federal Reserve’s last policy meeting.

I'll have some of what the Fed is.... mokin:

The ideal interest rate for the US economy in current conditions would be minus 5 per cent, according to internal analysis prepared for the Federal Reserve’s last policy meeting.

The analysis was based on a so-called Taylor-rule approach that estimates an appropriate interest rate based on unemployment and inflation.

A central bank cannot cut interest rates below zero. However, the staff research suggests the Fed should maintain unconventional policies that provide stimulus roughly equivalent to an interest rate of minus 5 per cent.

Fed staff separately estimated what size and type of unconventional operations, including asset purchases, might provide this level of stimulus. They suggested that the Fed should expand its asset purchases by even more than the $1,150bn (€885bn, £788bn) increase policymakers authorised at the last meeting, which included $300bn of Treasury purchases.

The assessment that the US central bank needs to provide stimulus equivalent to a substantially negative interest rate is unlikely to have changed ahead of this week’s policy meeting.

The Fed is not likely to embark on any substantial new programmes at this meeting, in large part because it will not have downgraded its economic forecasts since the last meeting. Indeed, Fed officials may see the risks to the economy as a little more balanced than they were in March, though policymakers probably still see these risks as overall weighted to the downside.

This could set the stage for a more detailed discussion of the framework that will ultimately govern the Fed’s exit strategy.

There is, though, a small but intriguing possibility that the Fed could follow the Bank of Canada in setting out an explicit timeframe over which it expects to keep short-term rates at virtually zero.

While this novel strategy is likely to at least provoke debate within the US central bank, which has shown itself willing to adopt measures first deployed elsewhere, many policymakers would probably be wary of adopting the Canadian approach, following their own unsatisfactory experience in providing guidance on interest rates after the dotcom bubble burst.

Others may feel the Canadian approach would be ineffective as it may not be seen as credibly binding the central bank’s future decisions.

Still, many Fed officials expect they may well keep rates near zero for another 18 months to two years and some might see value in making this more explicit.

Ben Bernanke, chairman, sees the massive expansion of bank reserves caused by the Fed’s unconventional operations as already providing a way to assure the market that the Fed will not be in a position to raise rates for quite some time to come.

The last meeting saw the Fed buy long-term treasuries for the first time in decades. The large initial impact of the move on markets is no longer visible, but officials think the policy was reasonably successful.

Previous staff analysis suggested the $300bn purchase would reduce the yield on 10-year treasuries by 25-35 basis points, and officials think the rate today is about this much lower than it would have been if they had not started buying.

Further purchases are possible, particularly if the Fed again downgrades its economic forecasts. The staff analysis comparing unconventional operations to interest rate cuts suggests more might be needed anyway.

However, policymakers are likely to watch how financial conditions respond to the already-authorised interventions before deciding whether to step up much further.

(From the Financial Times but you need to be a subscriber.)

[Jan Klimkowski]

A Total California Collapse seems imminent.

Except a generation of taxpayers (American in this case) will get screwed to keep on paying for all those luxury services such as.... cops & firefighters.

Arnie has already terminated school textbooks, and is about to zap teachers too.

June 13, 2009

Judgment day: broke California faces shutdown at Arnie Schwarzenegger ’s hands
California's famed redwood forests will have to close to visitors
Mike Harvey in San Francisco
timesonline (UK)

The state of California is in crisis and time has almost run out. Arnold Schwarzenegger, the Governor, has spent this week haggling with state legislators to agree cuts to basic services in one of the world’s largest economies.

The state’s top finance officials warned that unless an emergency austerity plan is agreed by Monday — and there is little chance that it will be — they will not be able to borrow the billions of dollars needed to keep the current government functioning. If California was a company, it would have gone bust months ago.

The breadth and depth of Mr Schwarzenegger’s cuts are unprecedented and no one in the state, not even its dozens of billionaires, will be unaffected. His more radical proposals include wiping billions of dollars from the education budget, with the school year shortened and larger classes.

Hundreds, possibly thousands, of police and firemen will be laid off, and state employees who keep their jobs face pay cuts of at least 10 per cent.

Parks will close, shutting access to thousands of square miles of beaches, redwood forest and other attractions that draw 80 million visitors a year. Thousands of prisoners will be released early and the notorious St Quentin penitentiary will be among state buildings put up for sale.

All financial aid for university students, affecting 200,000 people from low-income families, will end.

Local governments will no longer have to provide absentee ballots in elections, nor run programmes to help infants exposed to drugs. Even stray animals will no longer be kept alive for the statutory three days.

Mr Schwarzenegger, whose popularity has plunged to levels that George W. Bush would recognise, told lawmakers in Sacramento, the state capital: “California’s day of reckoning is here. Our wallet is empty. Our bank is closed. Our credit is dried up.”

For the self-styled Governator and former Hollywood action hero used to getting his way, the issue has become humiliating. His proposals last month to raise taxes and boost borrowing to help to cover the deficit were rejected.Now he has embarked on a “day of reckoning” strategy, asking voters to recognise that Californians must “live within our means”.

The crisis represents a dramatic fall not only for Mr Schwarzenegger but for America’s Golden State. It faces a $24 billion (£14 billion) deficit in the fiscal year starting on July 1 — nearly $700 per head of population.

Were it an independent country, California would be among the ten biggest economies in the world, but its finances have been crippled by the recession. Unemployment already stands at 11 per cent, the fifth-highest in the nation, and another 63,700 jobs were lost last month. Now it will almost certainly need federal guarantees from Washington to borrow money from the financial markets.

Shocked welfare organisations are scrambling to protest at the savagery of the social cuts. Jean Ross, the executive director of the California Budget Project, a public policy research group, wrote in the San Diego Tribune: “These proposals target children and the young, California’s very future.”

Indeed, they would send a state that prides itself on its youthful image, its innovations, its tradition of reaching the future first, reeling backward in time into what one advocate called “an era of Dickens”.The Governor says that he “sees the faces behind those dollars” but he and other Republicans in the legislature will not raise taxes again after agreeing to $12.8 billion in sales, personal income and vehicle tax rises earlier this year.

Last year overall personal income declined for the first time since 1938. The land of Hollywood’s dream factory has turned into a fiscal nightmare.

http://www.timesonline.co.uk/tol/news/wo...489325.ece

[Jan Klimkowski]

Genesis (Karl Denninger) has always treated mention of the Plunge Protection Team (PPT) as tinfoil, claiming - essentially - there is no logistical way the Fed or the US govt could interfere with markets to create false rallies etc.

Perhaps false flag rallies.. :joyman:

I digress.

Courtesy of Zero Hedge, it looks like Genesis et al may have found a fully functioning incarnation of the PPT:

Uhhhhh.... Ben? (Blatantly Unlawful Acts?)The Market TickerFriday, June 12. 2009
Posted by Karl Denninger in Federal Reserve at 12:01

Uhhhhh.... Ben? (Blatantly Unlawful Acts?)
Props to Zerohedge for having the nads to run this unconfirmed:

Which is why we were greatly troubled when we learned recently on good authority that Federal representatives may have opened multiple undisclosed-type accounts with none other than State Street Global Advisors over the past few months. All of these accounts are allegedly handled by one single trader, who is cocooned and isolated from interaction with other partners.

Zero Hedge can, as of yet, not vouch for this being 100% factual and is asking readers who may have additional knowledge of the situtation to please come forward and share their views (tips@zerohedge.com). If, indeed, the Federal Reserve or other derivatives of the administration, are now directly involved in trading, managing repo terms, stock lending, collateral distribution and other liquidity-crucial aspects of what was once an efficient market, then indeed this rally could be written off not merely as the biggest short covering rally of all time, but one that has been explicitly orchestrated by those who should be most impartial to an efficiently working market.

Uh, there's a bit more than just "writing off this rally" there.

If this is true and especially if The Fed is involved, there is a major problem with the law.

See, The Federal Reserve is explicitly not permitted to buy anything that doesn't have the full faith and credit of The US Federal Government behind it. It is that fact (found in Sections 13 and 14 of The Act) that has led me to repeatedly rant about The Fed's purchase of Fannie and Freddie paper - distinctly outrageous acts, given the plain language of the law. (Note that purchase of Ginnie Mae securities, which are fully guaranteed with full faith and credit, would be fine. Note also that Ginnie Mae didn't get in trouble fiscally either. Hmmmm....)

The Fed's charter and statement of operation is that liquidity operations are to be performed through the NY Fed dealing desk. That transparency is important. It is why I was able to detect the liquidity drain on September 24th and sound the alarm - even though it went unheeded - three days before the equity market collapsed.

This sort of transparency of open market operations is critical. Even though nobody gave a damn about the huge liquidity drain in September, the record remains for Congress and others to look at in the future, should they so choose, and if there is an investigation of the propriety of those actions, the proof is right there in front of people's nose.

If The Fed is dealing through one "special trader" at State Street, then all such transparency of action and intent is GONE.

Such intentional obfuscation can only have the purpose of being able to "act in the shadows." It is entirely possible that while Congress ignored my warning call, The Fed did not, realizing that there is a tremendous amount of exposure for them (as there should be!) for such an action, and therefore, acts were undertaken to hide this sort of thing in the future.

Bad juju folks.

Worse is that if this is true and is proved the risk of capital flight is extremely high. Do you want to participate in a market that is "rigged" like this by The Fed, operating with essentially limitless liquidity to game the markets any time they'd like in violation of the law?

If this is just a bad rumor or some tinfoil conspiracy, then it is. Lord knows there have been plenty about the "Plunge Protection Team" over the years.

If this proves up as real, The Fed must be immediately decertified and, if we can find a criminal act in here (I suspect that prosecutors might be able to) everyone responsible for this, or who acted with knowledge of it, needs to wind up in prison.

http://market-ticker.org/archives/1118-U...-Acts.html

[Magda Hassan]

The 'free' market is and always has been a massive fraud. Abolish it. Boycott it. Free housing, health, public transport, education and basic food security provided by the state and funded by a progressive tax system. Everything else is up for grabs. Trade to your hearts content. Quite simple really. The market is not rational. There has only ever been planned economies. But planned for whom?

[David Guyatt]

A Total California Collapse seems imminent.

Except a generation of taxpayers (American in this case) will get screwed to keep on paying for all those luxury services such as.... cops & firefighters.

Arnie has already terminated school textbooks, and is about to zap teachers too.

June 13, 2009

Judgment day: broke California faces shutdown at Arnie Schwarzenegger ’s hands
California's famed redwood forests will have to close to visitors
Mike Harvey in San Francisco
timesonline (UK)

The state of California is in crisis and time has almost run out. Arnold Schwarzenegger, the Governor, has spent this week haggling with state legislators to agree cuts to basic services in one of the world’s largest economies.

The state’s top finance officials warned that unless an emergency austerity plan is agreed by Monday — and there is little chance that it will be — they will not be able to borrow the billions of dollars needed to keep the current government functioning. If California was a company, it would have gone bust months ago.

The breadth and depth of Mr Schwarzenegger’s cuts are unprecedented and no one in the state, not even its dozens of billionaires, will be unaffected. His more radical proposals include wiping billions of dollars from the education budget, with the school year shortened and larger classes.

Hundreds, possibly thousands, of police and firemen will be laid off, and state employees who keep their jobs face pay cuts of at least 10 per cent.

Parks will close, shutting access to thousands of square miles of beaches, redwood forest and other attractions that draw 80 million visitors a year. Thousands of prisoners will be released early and the notorious St Quentin penitentiary will be among state buildings put up for sale.

All financial aid for university students, affecting 200,000 people from low-income families, will end.

Local governments will no longer have to provide absentee ballots in elections, nor run programmes to help infants exposed to drugs. Even stray animals will no longer be kept alive for the statutory three days.

Mr Schwarzenegger, whose popularity has plunged to levels that George W. Bush would recognise, told lawmakers in Sacramento, the state capital: “California’s day of reckoning is here. Our wallet is empty. Our bank is closed. Our credit is dried up.”

For the self-styled Governator and former Hollywood action hero used to getting his way, the issue has become humiliating. His proposals last month to raise taxes and boost borrowing to help to cover the deficit were rejected.Now he has embarked on a “day of reckoning” strategy, asking voters to recognise that Californians must “live within our means”.

The crisis represents a dramatic fall not only for Mr Schwarzenegger but for America’s Golden State. It faces a $24 billion (£14 billion) deficit in the fiscal year starting on July 1 — nearly $700 per head of population.

Were it an independent country, California would be among the ten biggest economies in the world, but its finances have been crippled by the recession. Unemployment already stands at 11 per cent, the fifth-highest in the nation, and another 63,700 jobs were lost last month. Now it will almost certainly need federal guarantees from Washington to borrow money from the financial markets.

Shocked welfare organisations are scrambling to protest at the savagery of the social cuts. Jean Ross, the executive director of the California Budget Project, a public policy research group, wrote in the San Diego Tribune: “These proposals target children and the young, California’s very future.”

Indeed, they would send a state that prides itself on its youthful image, its innovations, its tradition of reaching the future first, reeling backward in time into what one advocate called “an era of Dickens”.The Governor says that he “sees the faces behind those dollars” but he and other Republicans in the legislature will not raise taxes again after agreeing to $12.8 billion in sales, personal income and vehicle tax rises earlier this year.

Last year overall personal income declined for the first time since 1938. The land of Hollywood’s dream factory has turned into a fiscal nightmare.

http://www.timesonline.co.uk/tol/news/wo...489325.ece

An Austrian "solution" in the making eh....

[Peter Lemkin]

A Total California Collapse seems imminent.

Except a generation of taxpayers (American in this case) will get screwed to keep on paying for all those luxury services such as.... cops & firefighters.

Arnie has already terminated school textbooks, and is about to zap teachers too.

June 13, 2009

Judgment day: broke California faces shutdown at Arnie Schwarzenegger ’s hands
California's famed redwood forests will have to close to visitors
Mike Harvey in San Francisco
timesonline (UK)

The state of California is in crisis and time has almost run out. Arnold Schwarzenegger, the Governor, has spent this week haggling with state legislators to agree cuts to basic services in one of the world’s largest economies.

The state’s top finance officials warned that unless an emergency austerity plan is agreed by Monday — and there is little chance that it will be — they will not be able to borrow the billions of dollars needed to keep the current government functioning. If California was a company, it would have gone bust months ago.

The breadth and depth of Mr Schwarzenegger’s cuts are unprecedented and no one in the state, not even its dozens of billionaires, will be unaffected. His more radical proposals include wiping billions of dollars from the education budget, with the school year shortened and larger classes.

Hundreds, possibly thousands, of police and firemen will be laid off, and state employees who keep their jobs face pay cuts of at least 10 per cent.

Parks will close, shutting access to thousands of square miles of beaches, redwood forest and other attractions that draw 80 million visitors a year. Thousands of prisoners will be released early and the notorious St Quentin penitentiary will be among state buildings put up for sale.

All financial aid for university students, affecting 200,000 people from low-income families, will end.

Local governments will no longer have to provide absentee ballots in elections, nor run programmes to help infants exposed to drugs. Even stray animals will no longer be kept alive for the statutory three days.

Mr Schwarzenegger, whose popularity has plunged to levels that George W. Bush would recognise, told lawmakers in Sacramento, the state capital: “California’s day of reckoning is here. Our wallet is empty. Our bank is closed. Our credit is dried up.”

For the self-styled Governator and former Hollywood action hero used to getting his way, the issue has become humiliating. His proposals last month to raise taxes and boost borrowing to help to cover the deficit were rejected.Now he has embarked on a “day of reckoning” strategy, asking voters to recognise that Californians must “live within our means”.

The crisis represents a dramatic fall not only for Mr Schwarzenegger but for America’s Golden State. It faces a $24 billion (£14 billion) deficit in the fiscal year starting on July 1 — nearly $700 per head of population.

Were it an independent country, California would be among the ten biggest economies in the world, but its finances have been crippled by the recession. Unemployment already stands at 11 per cent, the fifth-highest in the nation, and another 63,700 jobs were lost last month. Now it will almost certainly need federal guarantees from Washington to borrow money from the financial markets.

Shocked welfare organisations are scrambling to protest at the savagery of the social cuts. Jean Ross, the executive director of the California Budget Project, a public policy research group, wrote in the San Diego Tribune: “These proposals target children and the young, California’s very future.”

Indeed, they would send a state that prides itself on its youthful image, its innovations, its tradition of reaching the future first, reeling backward in time into what one advocate called “an era of Dickens”.The Governor says that he “sees the faces behind those dollars” but he and other Republicans in the legislature will not raise taxes again after agreeing to $12.8 billion in sales, personal income and vehicle tax rises earlier this year.

Last year overall personal income declined for the first time since 1938. The land of Hollywood’s dream factory has turned into a fiscal nightmare.

http://www.timesonline.co.uk/tol/news/wo...489325.ece

An Austrian "solution" in the making eh....

Ah, who needs police or firemen or schools and textbooks or parks, et al. anyway! Don't forget Arnie was chosen to be Governor in order to hide the crimes of Enron and the 80 billion [not sued for] they had stolen from California - with artificially manipulated electricity prices up to 50x normal. Had that $$ been recovered when Enron still had assets, California might not be in quite the mess it now is. California is always spoken of as the 'trend setter' state in America...if this is the 'trend', prepare for America's 'Termination' very soon.