10.28.09
A GREAT summary of a looming problem I have discussed many times – municipal bankruptcy (use the search for “municipal bankruptcy” or “vallejo”). Check out this post from Zero Hedge:
Make sure you read the attached, inlaid report from Weeden. It outlines the problem amazingly well – problems such as the overabundance of government employees (as Marc Faber has pointed out) and their ballooning pension costs, and the federal mandates whose costs states must fund. The New York City example and Vallejo, CA example are unbelievable – government has no shame in how it spends our money – and how they find government jobs for their deadbeat nephews and such to waste more taxpayer money.
Your property taxes will likely rise then your city just might declare bankruptcy. In addition, your muni bonds might bust too. Have a nice day!
Chris Grande
PS. on an unrelated note, for those of you who enjoy reading detailed analysis of markets and economics, Jeremy Grantham’s letter this quarter was outstanding:
