{"id":573,"date":"2010-12-28T22:52:44","date_gmt":"2010-12-28T22:52:44","guid":{"rendered":"http:\/\/www.itmtrading.com\/blog\/?p=573"},"modified":"2010-12-28T22:52:44","modified_gmt":"2010-12-28T22:52:44","slug":"states-are-in-trouble-may-create-another-bailout","status":"publish","type":"post","link":"https:\/\/www.itmtrading.com\/blog\/states-are-in-trouble-may-create-another-bailout\/","title":{"rendered":"States are in Trouble, May Create another Bailout"},"content":{"rendered":"

State budgets are in trouble.\u00c2\u00a0 This problem has been dwarfed in part by the larger national and global economic crisis.\u00c2\u00a0 But one woman, Meredith Whitney, one of the most respected analysts on Wall Street<\/a> and known for her call big bank troubles long before the sub-prime crash, has spent the last 2 years and thousands of man hours culling through fifteen of the largest state\u00e2\u20ac\u2122s budgets.\u00c2\u00a0 She is warning of a financial meltdown at the state and local levels.<\/p>\n

She believes that it is as big a problem as the real estate\/mortgage meltdown and could have far reaching implications.\u00c2\u00a0 In New Jersey the governor has stopped a project to build a tunnel into Manhattan, stating \u00e2\u20ac\u0153we just don\u00e2\u20ac\u2122t have the money.\u00e2\u20ac\u009d\u00c2\u00a0 Illinois who spends twice as much as it takes in, in taxes is 6 months behind paying its bills.\u00c2\u00a0 From the University of Illinois to local pharmacies waiting on Medicare payments, Illinois is in the worst shape.\u00c2\u00a0 States around the country are trying to figure out where to get the money.<\/p>\n

There are a few pieces of this puzzle that are troubling.\u00c2\u00a0 The first is that benefit packages for state and local government employees are likely to get cut.\u00c2\u00a0 The second is that parts of the $3 trillion municipal bond market could default, leaving citizens and retirement funds that invested in them holding the bag.\u00c2\u00a0 Whitney says \u00e2\u20ac\u0153there is not a doubt in my mind that you will see a spate of municipal bond defaults.\u00c2\u00a0 You could see 50 to 100 sizable defaults maybe more, which will result in hundreds of billions of dollars in defaults.\u00e2\u20ac\u009d<\/p>\n

Right now ratings agencies like Moody\u00e2\u20ac\u2122s are saying that there is no need for concern, which concerns Whitney as she believes that there will be a real reason to be concerned within the next twelve months.<\/p>\n

The test will be this spring when the Federal stimulus money runs out and the states still need the money.\u00c2\u00a0 I would say prepare yourself for quantitative easing round 3!\u00c2\u00a0 I would bet money that the Federal Government will fire up the printing presses again, rather than deal with the real issues at hand, and put us further into debt, increase future inflation, devalue the dollar and rob our children of their future.\u00c2\u00a0 Now more than ever it is time to buy gold coins<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

State budgets are in trouble.\u00c2\u00a0 This problem has been dwarfed in part by the larger national and global economic crisis.\u00c2\u00a0 But […]<\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1207],"tags":[58,83,92],"class_list":["post-573","post","type-post","status-publish","format-standard","hentry","category-blog","tag-global-economic-crisis","tag-inflation","tag-municipal-bonds"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/posts\/573","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/comments?post=573"}],"version-history":[{"count":0,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/posts\/573\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/media?parent=573"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/categories?post=573"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/tags?post=573"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}