Yesterday we reported that oil prices dropped about 3%.
Well, today they declined another 1% for a two day fall of 4%.
Assuming that oil prices keep falling, which I expect them to do, although obviously not at the recent pace, that should make consumers feel better about things when filling up the gas tank in the spring and summer months.
And that in turn could provide a needed boost to consumer spending and economic growth as well.
Oil ends below $94 for two-session loss of over 4% says this about the recent action in the oil market:
"Oil futures fell below $94 a barrel on Thursday
to tally a two-session loss of 4.1% as comments from the European Central Bank's
president on downside risks to the region's economic recovery dulled prospects
for energy demand.
Traders awaited Friday's release of nonfarm payrolls data for
a hint on the progress of recovery in the U.S.
May crude fell $1.19, or
1.3%, to settle at $93.26 a barrel on the New York Mercantile Exchange."
Summing Up
This will help keep interest rates low as inflation worries aren't a concern.
And lower energy prices should provide a boost to both consumer spending and consumer confidence as well.
Now let's hope for a decent report on March unemployment tomorrow morning. 200,000 new jobs and an unchanged 7.7% unemployment rate are the consensus forecasts.
Thanks. Bob.
Thursday, April 4, 2013
Basketball Coaches Then and Now
By now you've probably heard about the despicable behavior of the Rutgers basketball coach who was fired yesterday. He should have been fired in December when his antics were known to Rutgers officials, but he wasn't.
In fact, he wasn't terminated until videos of his coaching 'tactics' were released by ESPN. See Rutgers Leaders Are Faulted on Abusive Coach.
But there was a time when coaches didn't act that way. I know that based on personal experience.
Thinking about what happened at Rutgers may cause us to pause and reflect on what's changed in our 'leadership's' definition of what has become acceptable behavior during the past half century. And the 'leadership' behavioral problem doesn't only exist with respect to how basketball coaches treat their players.
Maybe there's a broader societal lesson about leadership to be learned here, but let's leave that to be sorted out at another time.
Notable & Quotable provides this brief and timely anecdotal lesson in leadership and free choice as it reveals an exchange between legendary UCLA basketball Coach John Wooden and his legendary player and free spirit Bill Walton:
""From "Wooden: A Lifetime of Observations and Reflections," published in 1997 by Hall of Fame UCLA basketball coach John Wooden:
There was a rule against facial hair for players on UCLA basketball teams. One day Bill Walton came to practice after a ten-day break wearing a beard. I asked him, "Bill, have you forgotten something?"
He replied, "Coach, if you mean the beard, I think I should be allowed to wear it. It's my right."
I asked, "Do you believe in that strongly?" He answered, "Yes I do, coach. Very much."
I looked at him and said politely, "Bill, I have a great respect for individuals who stand up for those things in which they believe. I really do. And the team is going to miss you."
Bill went to the locker room and shaved the beard off before practice began. There were no hard feelings. I wasn't angry and he wasn't mad. He understood the choice was between his own desires and the good of the team, and Bill was a team player.
I think if I had given in to him I would have lost control not only of Bill but of his teammates."
Summing Up
Maybe the 'good old days' really were that good.
Coach Wooden certainly knew how to act, and he won lots of championships acting that way.
And his players both respected and revered him as well.
That's my take.
Thanks. Bob.
In fact, he wasn't terminated until videos of his coaching 'tactics' were released by ESPN. See Rutgers Leaders Are Faulted on Abusive Coach.
But there was a time when coaches didn't act that way. I know that based on personal experience.
Thinking about what happened at Rutgers may cause us to pause and reflect on what's changed in our 'leadership's' definition of what has become acceptable behavior during the past half century. And the 'leadership' behavioral problem doesn't only exist with respect to how basketball coaches treat their players.
Maybe there's a broader societal lesson about leadership to be learned here, but let's leave that to be sorted out at another time.
Notable & Quotable provides this brief and timely anecdotal lesson in leadership and free choice as it reveals an exchange between legendary UCLA basketball Coach John Wooden and his legendary player and free spirit Bill Walton:
""From "Wooden: A Lifetime of Observations and Reflections," published in 1997 by Hall of Fame UCLA basketball coach John Wooden:
There was a rule against facial hair for players on UCLA basketball teams. One day Bill Walton came to practice after a ten-day break wearing a beard. I asked him, "Bill, have you forgotten something?"
He replied, "Coach, if you mean the beard, I think I should be allowed to wear it. It's my right."
I asked, "Do you believe in that strongly?" He answered, "Yes I do, coach. Very much."
I looked at him and said politely, "Bill, I have a great respect for individuals who stand up for those things in which they believe. I really do. And the team is going to miss you."
Bill went to the locker room and shaved the beard off before practice began. There were no hard feelings. I wasn't angry and he wasn't mad. He understood the choice was between his own desires and the good of the team, and Bill was a team player.
I think if I had given in to him I would have lost control not only of Bill but of his teammates."
Summing Up
Maybe the 'good old days' really were that good.
Coach Wooden certainly knew how to act, and he won lots of championships acting that way.
And his players both respected and revered him as well.
That's my take.
Thanks. Bob.
Chicago's Mayor, Teachers Unions, Failing Schools, Unaffordable Schools, Parental Choice, Charter Schools and Taxpayers ... Racist or Responsible?
This Chicago teachers union and accompanying political story just keeps getting more and more ridiculous. That said, it's just another example of 'old school' Chicago politics in action.
The government run schools are failing to educate the kids and the city is broke. Meanwhile, the teachers union extracted from the city's politicians generous and unaffordable benefits for its members during last year's strike. All to be paid for by the taxpayers, of course.
Now the city is making a minimal effort to rein in expenses, and the teachers union is crying foul, racism and anything else that will divert attention from the real problems --- a failing educational system and an unaffordable and unaccountable one at that.
Rahm's Latest Union Beating has the story:
"Chicago Mayor Rahm Emanuel may have thought he bought labor peace when he agreed to a fat increase in teacher pay to settle a strike last year. Instead the Chicago Teachers Union is throwing massive resistance against his plan to close 54 under-used public schools.
The closings are part of the city's attempt to address a budget gap projected to be $1 billion next year thanks to years of fiscal mismanagement. Annual pension payments for Chicago teachers will rise to $593.3 million from $218.6 million by 2016, and the city has to finance that 16% teacher pay raise over four years. Chicago Schools CEO Barbara Byrd-Bennett says closing the 54 schools that are operating at less than 69% capacity will save some $43 million in operating costs next year and $560 million in capital costs over 10 years.
Critics claim the closings break up neighborhood schools, but most of the 14,000 affected kids won't need to travel more than a few blocks. Many of the schools are on the city's minority-dominated South and West sides, leading CTU President Karen Lewis to call the plan "racist," adding that it "sets an example that low-income, African-American children are disposable."
The real racial offense is leaving another generation of black children to languish in some of the nation's worst schools, with a high school graduation rate near 60%. Chicago's black population dropped by 181,000 between 2000 and 2010, and much of that decline is on the South and West sides. The Chicago Public School system now has only about 400,000 students despite a capacity for 500,000.
Ms. Lewis's real fear is that closing those schools will expedite student migration to non-union charter schools. There are currently 119 charters operating in the city and serving some 40,000 Chicago students. Last year the charter waiting list was more than 19,000, one of the longest in the country.
In Chicago, two-thirds of charter schools perform better on state assessment tests and at charter high schools three-quarters of graduates go to college. A recent poll by the Joyce Foundation and Chicago Tribune found that about two-thirds of Chicagoans support new charters opening in neighborhoods where kids are on the waiting list and 67.9% say it should be easier for charters to expand.
Charters also save the city money. State law says charters may get between 75% and 125% of per pupil spending in the district. But in practice most get an average of 78% what Chicago spends per pupil on traditional public schools, according to the Illinois Network of Charter Schools.
Mayor Emanuel campaigned on his support for charters and Chicago has approved 11 new charters for this fall. But to assuage the unions, Ms. Bennett says she won't let charter schools use the empty buildings left from the 54 closing schools. Never mind that the buildings were paid for by Chicago taxpayers, and they'll go unused or be sold for very little otherwise.
Closing under-used and failing schools is among the remedies proposed by President Obama's Race to the Top program, and failing businesses are closed every day. Only in American public education do people argue with a straight face that failing schools need to be kept open "for the children.""
Summing Up
Chicago is a great example of the hypocrisy surrounding American politics, fiscal responsibility, public education, teachers unions and individual freedom of choice.
Charter schools provide better educational opportunities to parents and students at a lower cost to taxpayers.
And they're attended by students of parents who voluntarily choose for their children to attend them. The charter schools are so popular that there is a waiting list to get in, so what does the city of Chicago do?
Incredibly, the head of Chicago's schools has decided that charter schools can't use the buildings being closed by the public school system. That's total lunacy and total capitulation to the teachers union. Now we know who's really in charge of the Chicago schools, and it's not the city.
But that's what happens when politics and teachers unions combine to "help the children" and fight off "racism," while continuing to fleece the taxpayers and do great harm to the future prospects of the very children they're 'helping.'
Wow!
Thanks. Bob.
The government run schools are failing to educate the kids and the city is broke. Meanwhile, the teachers union extracted from the city's politicians generous and unaffordable benefits for its members during last year's strike. All to be paid for by the taxpayers, of course.
Now the city is making a minimal effort to rein in expenses, and the teachers union is crying foul, racism and anything else that will divert attention from the real problems --- a failing educational system and an unaffordable and unaccountable one at that.
Rahm's Latest Union Beating has the story:
"Chicago Mayor Rahm Emanuel may have thought he bought labor peace when he agreed to a fat increase in teacher pay to settle a strike last year. Instead the Chicago Teachers Union is throwing massive resistance against his plan to close 54 under-used public schools.
The closings are part of the city's attempt to address a budget gap projected to be $1 billion next year thanks to years of fiscal mismanagement. Annual pension payments for Chicago teachers will rise to $593.3 million from $218.6 million by 2016, and the city has to finance that 16% teacher pay raise over four years. Chicago Schools CEO Barbara Byrd-Bennett says closing the 54 schools that are operating at less than 69% capacity will save some $43 million in operating costs next year and $560 million in capital costs over 10 years.
Critics claim the closings break up neighborhood schools, but most of the 14,000 affected kids won't need to travel more than a few blocks. Many of the schools are on the city's minority-dominated South and West sides, leading CTU President Karen Lewis to call the plan "racist," adding that it "sets an example that low-income, African-American children are disposable."
The real racial offense is leaving another generation of black children to languish in some of the nation's worst schools, with a high school graduation rate near 60%. Chicago's black population dropped by 181,000 between 2000 and 2010, and much of that decline is on the South and West sides. The Chicago Public School system now has only about 400,000 students despite a capacity for 500,000.
Ms. Lewis's real fear is that closing those schools will expedite student migration to non-union charter schools. There are currently 119 charters operating in the city and serving some 40,000 Chicago students. Last year the charter waiting list was more than 19,000, one of the longest in the country.
In Chicago, two-thirds of charter schools perform better on state assessment tests and at charter high schools three-quarters of graduates go to college. A recent poll by the Joyce Foundation and Chicago Tribune found that about two-thirds of Chicagoans support new charters opening in neighborhoods where kids are on the waiting list and 67.9% say it should be easier for charters to expand.
Charters also save the city money. State law says charters may get between 75% and 125% of per pupil spending in the district. But in practice most get an average of 78% what Chicago spends per pupil on traditional public schools, according to the Illinois Network of Charter Schools.
Mayor Emanuel campaigned on his support for charters and Chicago has approved 11 new charters for this fall. But to assuage the unions, Ms. Bennett says she won't let charter schools use the empty buildings left from the 54 closing schools. Never mind that the buildings were paid for by Chicago taxpayers, and they'll go unused or be sold for very little otherwise.
Closing under-used and failing schools is among the remedies proposed by President Obama's Race to the Top program, and failing businesses are closed every day. Only in American public education do people argue with a straight face that failing schools need to be kept open "for the children.""
Summing Up
Chicago is a great example of the hypocrisy surrounding American politics, fiscal responsibility, public education, teachers unions and individual freedom of choice.
Charter schools provide better educational opportunities to parents and students at a lower cost to taxpayers.
And they're attended by students of parents who voluntarily choose for their children to attend them. The charter schools are so popular that there is a waiting list to get in, so what does the city of Chicago do?
Incredibly, the head of Chicago's schools has decided that charter schools can't use the buildings being closed by the public school system. That's total lunacy and total capitulation to the teachers union. Now we know who's really in charge of the Chicago schools, and it's not the city.
But that's what happens when politics and teachers unions combine to "help the children" and fight off "racism," while continuing to fleece the taxpayers and do great harm to the future prospects of the very children they're 'helping.'
Wow!
Thanks. Bob.
U.S. Manufacturing Jobs Needed ... We're Continuously Losing Ground as a Nation
U.S. manufacturing has been draining jobs for many years now. From time to time we hear about the importance of good jobs to our economic future, and we know that manufacturing employment has historically been a jobs booster.
However, the outflow continues and there appears to be little political policy directed at reviving this important piece of the U.S. economic equation.
Signs of Factory Revival Hard to Spot has the gruesome details:
"The idea that American manufacturing is on the cusp of a renaissance is everywhere these days—except in the hard numbers.
It's true that industrial production has grown twice as fast as the economy as a whole in this recovery, and manufacturers are adding jobs again. But economists see those gains as too small relative to what was lost in previous years to suggest a full-blown revival. Factories fell so hard, the logic goes, some gains are a given.
"There's simply no statistical evidence of a broader renaissance at this point," says Daniel Meckstroth, chief economist with the Manufacturers Alliance for Productivity and Innovation, an Arlington, Va., group that represents mostly large U.S. producers.
Mr. Meckstroth says measures that look deeper inside the sector continue to flash warning signs. Take factory closings. For the past 13 years, the rate factories have been closing has been declining. That's good. The trouble is the rate of openings has been falling even faster. Simply put, America's factories are dying faster than they're being born. . . .
Tracking the birth and death of factories "isn't a perfect indicator," says Mr. Meckstroth. "But it's the one thing we have that's most current—and it doesn't show any revival."
The nation's stubbornly wide trade deficit in manufactured goods is another trouble sign. If American factories have regained their competitive edge, it would make sense for them to be selling more abroad as well as at home—trimming the imbalance. But that hasn't happened.
Another way to gauge competitiveness is to look at the share of manufactured goods purchased in the U.S. that are imported. This includes everything from finished products, like a blender, to car parts that are then used in a U.S. factory to build a vehicle. A revived U.S. factory sector ought to be grabbing more of its home market, but that also isn't happening, at least not yet.
Mr. Meckstroth estimates that in 2012, imports accounted for nearly 40% of the manufacturing goods consumed in the U.S.—slightly more than the year before. Indeed, after dropping a bit during the recession, the share of imports has been rising for years. It was a mere 9% in 1967, when the government began tracking this measure.
Many say falling energy costs, driven by the nation's natural-gas boom, will help fuel a manufacturing revival. But the price of natural gas is only one factor companies consider when they're deciding where to build.
"Measured productivity growth has been strong," he wrote, "but U.S. export performance—arguably a more reliable indicator of competitiveness—remains middling at best.". . .
Meanwhile, many U.S. producers say some of the biggest barriers to a revival are factors like health-care costs and mounting regulations that make it costly to expand domestic operations."
Summing Up
40% of the manufactured products we buy now are made outside of the U.S. compared to 9% in 1967. That's a staggering number of lost employment opportunities for U.S. workers.
We need to bend that disastrous trend and head for 30% and below rather than continue on the present path toward 50% and above. And it won't happen just by talking about it. It will take a substantial commitment by our government knows best gang to encourage the necessary private sector investment.
More President Obama "feel good happy talk" emphasizing the 'need' for additional public financed "investments" in electric cars, other green projects and ObamaCare won't do the trick. They're merely examples of simple misplaced priorities and wasted time and taxpayer money. Our priorities need to change, and real and lasting private sector jobs growth needs serious attention. Among other things, that requires serious tax reform to encourage domestic investment. What we don't need are higher taxes to support more wasteful government spending in the name of 'investing.'
The simple fact is that manufacturing jobs are really good jobs, and we don't have nearly enough good jobs. Ditto for energy related jobs.
And with respect to increasing employment by building more public infrastructure, that won't solve our manufacturing jobs problem either. In fact, more government created jobs related to health care and construction won't do anything for the competitiveness of U.S. based manufacturing.
If we don't change direction and begin to look to the private sector for jobs and growth, it looks like Europe here we come.
Let's not do that to our young people, our kids and our grandkids.
That's not fair and that's my take.
Thanks. Bob.
However, the outflow continues and there appears to be little political policy directed at reviving this important piece of the U.S. economic equation.
Signs of Factory Revival Hard to Spot has the gruesome details:
"The idea that American manufacturing is on the cusp of a renaissance is everywhere these days—except in the hard numbers.
It's true that industrial production has grown twice as fast as the economy as a whole in this recovery, and manufacturers are adding jobs again. But economists see those gains as too small relative to what was lost in previous years to suggest a full-blown revival. Factories fell so hard, the logic goes, some gains are a given.
"There's simply no statistical evidence of a broader renaissance at this point," says Daniel Meckstroth, chief economist with the Manufacturers Alliance for Productivity and Innovation, an Arlington, Va., group that represents mostly large U.S. producers.
Mr. Meckstroth says measures that look deeper inside the sector continue to flash warning signs. Take factory closings. For the past 13 years, the rate factories have been closing has been declining. That's good. The trouble is the rate of openings has been falling even faster. Simply put, America's factories are dying faster than they're being born. . . .
To be sure, many U.S. manufacturers are doing better than they have in some time. That's visible in hiring. Manufacturers have added more than 500,000 jobs since early 2010, and (last week's) report from the Institute for Supply Management showed manufacturers continued expanding in March. But those gains pale compared with the deep hole created during the recession and just before it: U.S. factories lost nearly 5.7 million jobs from 2000 to 2010. . . .
Tracking the birth and death of factories "isn't a perfect indicator," says Mr. Meckstroth. "But it's the one thing we have that's most current—and it doesn't show any revival."
The nation's stubbornly wide trade deficit in manufactured goods is another trouble sign. If American factories have regained their competitive edge, it would make sense for them to be selling more abroad as well as at home—trimming the imbalance. But that hasn't happened.
Another way to gauge competitiveness is to look at the share of manufactured goods purchased in the U.S. that are imported. This includes everything from finished products, like a blender, to car parts that are then used in a U.S. factory to build a vehicle. A revived U.S. factory sector ought to be grabbing more of its home market, but that also isn't happening, at least not yet.
Mr. Meckstroth estimates that in 2012, imports accounted for nearly 40% of the manufacturing goods consumed in the U.S.—slightly more than the year before. Indeed, after dropping a bit during the recession, the share of imports has been rising for years. It was a mere 9% in 1967, when the government began tracking this measure.
Many say falling energy costs, driven by the nation's natural-gas boom, will help fuel a manufacturing revival. But the price of natural gas is only one factor companies consider when they're deciding where to build.
Goldman
Sachs economist Jan Hatzius, in a recent note
to investors, said "rising productivity, subdued labor costs, low energy prices,
and cost increases abroad have made the United States a much more attractive
place to produce, especially on a relative basis." But he also sees no evidence
that a broader revival is under way.
"Measured productivity growth has been strong," he wrote, "but U.S. export performance—arguably a more reliable indicator of competitiveness—remains middling at best.". . .
Meanwhile, many U.S. producers say some of the biggest barriers to a revival are factors like health-care costs and mounting regulations that make it costly to expand domestic operations."
Summing Up
40% of the manufactured products we buy now are made outside of the U.S. compared to 9% in 1967. That's a staggering number of lost employment opportunities for U.S. workers.
We need to bend that disastrous trend and head for 30% and below rather than continue on the present path toward 50% and above. And it won't happen just by talking about it. It will take a substantial commitment by our government knows best gang to encourage the necessary private sector investment.
More President Obama "feel good happy talk" emphasizing the 'need' for additional public financed "investments" in electric cars, other green projects and ObamaCare won't do the trick. They're merely examples of simple misplaced priorities and wasted time and taxpayer money. Our priorities need to change, and real and lasting private sector jobs growth needs serious attention. Among other things, that requires serious tax reform to encourage domestic investment. What we don't need are higher taxes to support more wasteful government spending in the name of 'investing.'
The simple fact is that manufacturing jobs are really good jobs, and we don't have nearly enough good jobs. Ditto for energy related jobs.
And with respect to increasing employment by building more public infrastructure, that won't solve our manufacturing jobs problem either. In fact, more government created jobs related to health care and construction won't do anything for the competitiveness of U.S. based manufacturing.
If we don't change direction and begin to look to the private sector for jobs and growth, it looks like Europe here we come.
Let's not do that to our young people, our kids and our grandkids.
That's not fair and that's my take.
Thanks. Bob.
Wednesday, April 3, 2013
My, How Things Change ... A World Awash in Oil ... U.S. as an Oil Exporter
Oil prices dropped nearly another 3% today due to lower demand and greater supply. Funny how the law of supply and demand always works out that way, isn't it?
Oil settles below $95, at more than a one week low says this:
"Oil futures sank Wednesday, as a sizable climb in last week's U.S. supplies and a slowdown in growth of private-payrolls combined to push prices below $95 a barrel. May crude fell $2.74, or 2.8%, to settle at $94.45 a barrel on the New York Mercantile Exchange. That was the lowest settlement for a most-active contract since March 22."
And it very much looks to me like this supply demand situation is likely to continue to drive down energy prices for quite some time. Assuming that's the case, it should provide a nice boost to consumer buying power and demand this spring and summer, and that in turn will augur well for U.S. economic activity and jobs.
And even more surprising, the U.S. is also capable of becoming a major exporter of oil and natural gas, assuming politics doesn't prevent us from doing so. Lots of good possibilities on the energy front.
Who'd a thunk it? Just when the economy shows early signs of softening again this spring, oil prices have started to tumble. Thus, the good news is that gasoline prices may be falling instead of increasing as we enter this year's important spring and summer seasons. Now that would be both different and a welcome change from past years.
But will the the U.S. become an oil exporter? And will gasoline prices drop to under $3 per gallon?
Could it really happen? Well, as a matter of fact, yes it could.
And if it does, that would be a great thing for the U.S. economy, jobs, consumer demand, avoiding inflation and our U.S. national security as well.
All we need now is for the politicians to do the right thing, which of course is never a sure thing. But there's hope.
Oil Exports Get Second Look is subtitled 'As Domestic Output Rises, Industry Weighs Push to Ease Ban Dating From '70s:'
"The U.S. energy industry is suddenly talking about something that was unthinkable a few years ago: exporting crude oil.
"We live in an interconnected, mutually dependent world that needs free trade," Ryan Lance, the chief executive of ConocoPhillips, said. This should include, "at some point, even exports of oil," he added.
Opponents of the idea counter that allowing exports could push up prices at the pump for consumers and businesses, and make the U.S. more dependent on foreign oil.
Some energy executives say exporting oil would solve a problem faced by U.S. refineries. America is producing more and more of its light, sweet crude, but a majority of U.S. refineries are set up to handle the heavy oil from Latin America and elsewhere that has more sulfur and is harder to process than light, sweet crude.
Public support is also unlikely, some analysts say. Crude makes up 72% of the price of gasoline, and oil companies will be hard-pressed to explain why the U.S. is sending its growing oil bounty abroad and not lowering pump prices at home, said Mike Kelly, an analyst at Global Hunter Securities.
"American oil should be kept here to benefit our consumers, not shipped to Europe or Asia to help boost oil-company profits," Mr. Markey said.
The U.S. is expected to pump 9 million barrels of light, sweet crude a day in 2020, almost double the 4.6 million barrels a day in 2011, according to consultancy Turner, Mason & Co. Meanwhile, America's capacity to refine that kind of oil is expected to increase only slightly to 8 million barrels a day from the current level of 7.7 million barrels a day, the firm said.
Refining capacity's inability to keep up with production in some areas has occurred "faster than Washington is prepared to acknowledge," said Ed Morse, global head of commodities research at Citi Research.
The oil-exports debate could mirror the one the energy industry has had over the export of liquefied natural gas. Producers have been clamoring for U.S. government permission to sell such gas overseas, where prices are much higher than in the U.S.
Oil settles below $95, at more than a one week low says this:
"Oil futures sank Wednesday, as a sizable climb in last week's U.S. supplies and a slowdown in growth of private-payrolls combined to push prices below $95 a barrel. May crude fell $2.74, or 2.8%, to settle at $94.45 a barrel on the New York Mercantile Exchange. That was the lowest settlement for a most-active contract since March 22."
And it very much looks to me like this supply demand situation is likely to continue to drive down energy prices for quite some time. Assuming that's the case, it should provide a nice boost to consumer buying power and demand this spring and summer, and that in turn will augur well for U.S. economic activity and jobs.
And even more surprising, the U.S. is also capable of becoming a major exporter of oil and natural gas, assuming politics doesn't prevent us from doing so. Lots of good possibilities on the energy front.
Who'd a thunk it? Just when the economy shows early signs of softening again this spring, oil prices have started to tumble. Thus, the good news is that gasoline prices may be falling instead of increasing as we enter this year's important spring and summer seasons. Now that would be both different and a welcome change from past years.
But will the the U.S. become an oil exporter? And will gasoline prices drop to under $3 per gallon?
Could it really happen? Well, as a matter of fact, yes it could.
And if it does, that would be a great thing for the U.S. economy, jobs, consumer demand, avoiding inflation and our U.S. national security as well.
All we need now is for the politicians to do the right thing, which of course is never a sure thing. But there's hope.
Oil Exports Get Second Look is subtitled 'As Domestic Output Rises, Industry Weighs Push to Ease Ban Dating From '70s:'
"The U.S. energy industry is suddenly talking about something that was unthinkable a few years ago: exporting crude oil.
"We live in an interconnected, mutually dependent world that needs free trade," Ryan Lance, the chief executive of ConocoPhillips, said. This should include, "at some point, even exports of oil," he added.
Opponents of the idea counter that allowing exports could push up prices at the pump for consumers and businesses, and make the U.S. more dependent on foreign oil.
Some energy executives say exporting oil would solve a problem faced by U.S. refineries. America is producing more and more of its light, sweet crude, but a majority of U.S. refineries are set up to handle the heavy oil from Latin America and elsewhere that has more sulfur and is harder to process than light, sweet crude.
But any export plans are likely to meet stiff
resistance—from those who want the U.S. to keep reducing its dependence on
foreign oil, and from refiners that can process and profit from relatively cheap
U.S. crude. Bill Day, a spokesman for Valero
Energy Corp., one of the largest independent refiners
in the U.S. and a major buyer of domestically produced oil, said the company is
carefully monitoring the issue.
Public support is also unlikely, some analysts say. Crude makes up 72% of the price of gasoline, and oil companies will be hard-pressed to explain why the U.S. is sending its growing oil bounty abroad and not lowering pump prices at home, said Mike Kelly, an analyst at Global Hunter Securities.
"American oil should be kept here to benefit our consumers, not shipped to Europe or Asia to help boost oil-company profits," Mr. Markey said.
The U.S. is expected to pump 9 million barrels of light, sweet crude a day in 2020, almost double the 4.6 million barrels a day in 2011, according to consultancy Turner, Mason & Co. Meanwhile, America's capacity to refine that kind of oil is expected to increase only slightly to 8 million barrels a day from the current level of 7.7 million barrels a day, the firm said.
Refining capacity's inability to keep up with production in some areas has occurred "faster than Washington is prepared to acknowledge," said Ed Morse, global head of commodities research at Citi Research.
The oil-exports debate could mirror the one the energy industry has had over the export of liquefied natural gas. Producers have been clamoring for U.S. government permission to sell such gas overseas, where prices are much higher than in the U.S.
But Dow
Chemical Co. and other companies have said exports
would raise natural-gas prices at home and hurt U.S. manufacturers. The
Department of Energy is expected to make a decision on natural-gas exports later
this year."
Summing Up
Oil is a global commodity, regardless of popular opinion.
And increasing global supply is good for lowering oil prices, regardless of what the politicans say or what people may choose to believe. It's a simple matter of the law of supply and demand at work.
If we export more oil, the exporters will make greater profits and pay more taxes to the U.S. government. Similarly, if we refine more oil, the same result will occur. And if we use more oil domestically that we produce domestically, our costs will be lower due to lower transportation costs. There is no legitimate reason to curtail the export possibilities of either domestically produced natural gas or crude or refined oil.
And that's true regardless of what the politicians or self serving business customers may say. Free markets work when given a chance. We should have learned that simple lesson long ago.
That's my take.
Thanks. Bob.
Europe's a Mess and Its Unemployment Rate is 12% ... Why Can't We See What Big Government and a Lack of Competitiveness Bring?
Big government and European economies go together. So do America's 'progressive' policies and a weak economy.
Thus, it's reasonable to assume that emulating Europe will tend to make our own economic situation more closely resemble Europe's over time -- big government combined with high unemployment and weak economic growth.
Yet our government knows best gang continues to take us straight down that path. And they're doing it for short term political gains and not for the general economic health and well being of all Americans. Either that or they really are economic illiterates, which appears to be a distinct and growing possibility.
In any event, let's take a peak at what is happening in the world of Europe's social-democratic big government. Maybe knowing more about what's going on over there will help shock us out of our own complacency about the prospects for solid long term U.S. growth and high employment levels. I hope so.
Vital Signs Chart: European Unemployment at 12% shows the sickening picture:
"The euro zone is still grappling with a lack of jobs. The unemployment rate for the currency bloc’s 17 nations was a seasonally adjusted 12% in February, up from 10.9% in February 2012. Among member nations with the lowest unemployment rates are Austria, at 4.8%, and Germany, at 5.4%. Among members with the highest unemployment rates is Spain, at 26.3%.
And New Signs Point to Deeper Europe Malaise says this about the situation:
"Rising unemployment and falling manufacturing activity in the euro zone indicate a slide into a deepening recession, intensifying the challenge for euro members and the European Central Bank to find a remedy against the slump.
Tuesday's data releases add to evidence that the euro-zone economy contracted again in the first quarter, for the sixth quarter in a row. Only Germany and a few small euro members are thought to have grown in the first quarter.
The recession is particularly acute in Southern Europe. Unemployment in Spain and Greece is over 25%. Shrinking economies in Greece, Spain, Italy and Portugal are making it harder to stabilize high public debts.
The euro zone's economy overall isn't yet shrinking at a rapid pace, like in the recession of 2008-09, when the bloc lost more than 5% of its gross domestic product. Rather, the euro zone appears caught in a slow, grinding contraction, with few signs of stabilization apart from in Germany. . . . "the euro-zone manufacturing sector looks likely to have acted as a drag on the economy in the first quarter, with an acceleration in the rate of decline in March raising the risk that the downturn may also intensify in the second quarter," said Chris Williamson, Markit's chief economist. . . .
Summing Up
The more than a decade ago creation of the Euro currency coupled with an ever growing dependency on government have resulted in weak economies, high unemployment and the growing irrelevance of European countries in the global economy.
Thomas Jefferson certainly had it right when he said that the best government is the one which governs least.
So did President Reagan have it right which he said that government wasn't the solution but instead that it represented the problem.
And so did President Clinton at least have the "right idea" when he declared that the era of big government was over. Unfortunately, what he said never happened.
Instead the popular 'progressive' movement has taken over U.S. government for now, and we may be destined to relearn the lessons of economic history, personal freedoms and the impact of big government.
Let's hope that we don't create that future for ourselves, because all we have to do is look at what's happening in Europe today.
My vote is that we choose to learn the lessons being offered by Europe 'vicariously' instead of by direct experience.
So even though it may be too late for the Europeans to get their act together anytime soon, there's still time enough for us.
But it's definitely time to get going in the right direction.
At least that's my take.
Thanks. Bob.
Thus, it's reasonable to assume that emulating Europe will tend to make our own economic situation more closely resemble Europe's over time -- big government combined with high unemployment and weak economic growth.
Yet our government knows best gang continues to take us straight down that path. And they're doing it for short term political gains and not for the general economic health and well being of all Americans. Either that or they really are economic illiterates, which appears to be a distinct and growing possibility.
In any event, let's take a peak at what is happening in the world of Europe's social-democratic big government. Maybe knowing more about what's going on over there will help shock us out of our own complacency about the prospects for solid long term U.S. growth and high employment levels. I hope so.
Vital Signs Chart: European Unemployment at 12% shows the sickening picture:
"The euro zone is still grappling with a lack of jobs. The unemployment rate for the currency bloc’s 17 nations was a seasonally adjusted 12% in February, up from 10.9% in February 2012. Among member nations with the lowest unemployment rates are Austria, at 4.8%, and Germany, at 5.4%. Among members with the highest unemployment rates is Spain, at 26.3%.
"Rising unemployment and falling manufacturing activity in the euro zone indicate a slide into a deepening recession, intensifying the challenge for euro members and the European Central Bank to find a remedy against the slump.
Tuesday's data releases add to evidence that the euro-zone economy contracted again in the first quarter, for the sixth quarter in a row. Only Germany and a few small euro members are thought to have grown in the first quarter.
The recession is particularly acute in Southern Europe. Unemployment in Spain and Greece is over 25%. Shrinking economies in Greece, Spain, Italy and Portugal are making it harder to stabilize high public debts.
The euro zone's economy overall isn't yet shrinking at a rapid pace, like in the recession of 2008-09, when the bloc lost more than 5% of its gross domestic product. Rather, the euro zone appears caught in a slow, grinding contraction, with few signs of stabilization apart from in Germany. . . . "the euro-zone manufacturing sector looks likely to have acted as a drag on the economy in the first quarter, with an acceleration in the rate of decline in March raising the risk that the downturn may also intensify in the second quarter," said Chris Williamson, Markit's chief economist. . . .
Summing Up
The more than a decade ago creation of the Euro currency coupled with an ever growing dependency on government have resulted in weak economies, high unemployment and the growing irrelevance of European countries in the global economy.
Thomas Jefferson certainly had it right when he said that the best government is the one which governs least.
So did President Reagan have it right which he said that government wasn't the solution but instead that it represented the problem.
And so did President Clinton at least have the "right idea" when he declared that the era of big government was over. Unfortunately, what he said never happened.
Instead the popular 'progressive' movement has taken over U.S. government for now, and we may be destined to relearn the lessons of economic history, personal freedoms and the impact of big government.
Let's hope that we don't create that future for ourselves, because all we have to do is look at what's happening in Europe today.
My vote is that we choose to learn the lessons being offered by Europe 'vicariously' instead of by direct experience.
So even though it may be too late for the Europeans to get their act together anytime soon, there's still time enough for us.
But it's definitely time to get going in the right direction.
At least that's my take.
Thanks. Bob.
Dirty Little Secrets of Local and State Politicians Concerning Issuance of "Non-Taxpayer Approved" Government Debt Obligations
The federal government knows best gang doesn't exactly have a habit of leveling with the American people. We the People have come to learn that over time.
As an example, government officials acknowledge ~$16 trillion in debt but choose not to talk about the other $100 trillion in unfunded entitlements.
At the state and local levels, however, there's not even an acknowledgement of the approximately $7.3 trillion in debt that for the most part has never been approved by taxpayers. Instead we all pretend that the various states and local municipalities balance their budgets each year. If that's the case, where did the $7.3 trillion liability originate?
So in the battle of the bad actors, who's worse? Is it the national politicians or is it the local and state crew? Well, it looks very much like a tie to me. They both suck in their fiduciary roles as our elected "public servants." Read on and see why that's the case.
The Debt Bomb That Taxpayers Won't See Coming is subtitled 'State and local government owe $7.3 trillion in promises they've made that were never approved by taxpayers:'
"Earlier this month, the Securities and Exchange Commission charged Illinois officials with making misleading statements to bond investors about the state's pension system. The agency detailed a long list of deceptive practices including failure to tell investors that the system was so underfunded that it risked bankruptcy.
Illinois taxpayers, as well as the holders of its debt, will ultimately bear the burden of the officials' misdeeds. But there is nothing unique about the Prairie State. For years, elected officials in states and municipalities across the country have been imprudently piling up obligations that are imposing serious strains on budgets, prompting higher taxes and cutbacks in services.
In January, city officials in Sacramento, California's capital, reported . . . that Sacramento had racked up some $2 billion in obligations (mostly pensions and retiree health care). All this for a municipality of 477,000 residents with an annual general fund budget of just $366 million. . . .
Servicing its debt in years to come will only add more woe, especially given the intractability of public unions. The budget report noted that "While reducing staff is clearly not the preferred method for reducing costs, the city has a very limited ability to reduce the cost of labor absent cooperation from the city's employee groups."
According to studies by the Pew Center on the States, states and the biggest cities have made nearly three-quarters of a trillion dollars in promises to pay for retiree health-care insurance. Yet governments have set aside only about 5% of the money they'll need to pay for these promises.
This year a Chicago city commission reported that retiree health-care expenditures would soar from $109 million in this year's budget to $541 million in a decade. After concluding that the expenditures were unaffordable, one member of the commission proposed that retirees be required to sign on to the Illinois Health Insurance Exchange being created under President Obama's Affordable Care Act. Health insurance would be cheaper if it is subsidized by the federal government.
A December report by the States Project, a joint venture of Harvard's Institute of Politics and the University of Pennsylvania's Fels Institute of Government, estimated that state and local governments now owe in sum a staggering $7.3 trillion. Incredibly, the vast majority of this debt has never been approved by taxpayers, who are often unaware of the extent of their obligations.
Most state constitutions and many municipal charters limit borrowing and mandate voter approval. No matter. Politicians evade the limits, issuing billions of dollars in municipal offerings never approved by voters, sometimes with disastrous consequences. Courts have rubber-stamped many of these schemes.
The debt incurred by New Jersey for school projects is a case in point. In 2001, legislators in Trenton hatched a scheme to borrow a shocking $8.6 billion for refurbishing school buildings. The reaction to their plan in the press and among taxpayer groups was so negative that the politicians knew that voters would never approve it. So the legislature created an independent borrowing authority. Since it, and not taxpayers, would take on the debt, politicians claimed that there was no need for voters' consent. . . .
New Jersey's Schools Construction Corp. quickly squandered half of the money on patronage and inefficient construction practices, so in 2005 the state borrowed another $3.9 billion. All of the debt is being repaid by taxpayers. The authority, which was dissolved several years ago, had no revenues of its own.
Next door, in New York, a scant 5% of the Empire State's $63 billion in outstanding debt has ever been authorized by voters, according to the state comptroller. The rest has been engineered through independent authorities such as the Transitional Finance Authority.
These authorities are designed to circumvent voters. Of the seven bond offerings that have gone before New York voters in the past 25 years, four have been defeated. But thanks to unsanctioned debt, New Yorkers bear the second-highest per capita debt burden in the nation, $3,258, according to a January report by the state comptroller. New Jersey is No. 1, at $3,964.
To prevent the pile-up of hidden debt, taxpayers need to spearhead a revolt that will narrow the ability of officials to mortgage their future. Any such revolt will first of all seek an end to government sponsored defined-benefit pension plans, through which politicians promise benefits years hence to current employees in a manner that potentially leaves taxpayers on the hook for unlimited liabilities. Simpler, defined-contribution plans featuring individual retirement accounts would make government pension systems less expensive and their accounting more transparent.
Similarly, reformers will have to rein in borrowing by independent authorities and other government entities created to circumvent current debt limits. No state or municipality should be allowed to issue any debt for which taxpayers are ultimately liable without voter approval.
Without such reforms, many states risk becoming like Illinois, where a $7 billion tax increase in 2011 was largely gobbled up by rising pension costs, leaving the state with a $9 billion backlog of unpaid bills and the prospect of new taxes to pay off its $271 billion in debt. This is a future in which rising taxes don't provide citizens new services but merely go to pay off hidden debts."
Summing Up
Whatever happened to the idea of representative democracy? Self government? No taxation without representation?
Well, for one thing, public sector unions happened. For another, the Democratic Party and those public sector unions have been scratching each other's back for a long time now. And for a third, taxpayers haven't been paying any attention to the bills of the future being incurred by the government knows best gang in the present and on their 'behalf.'
So it's not just public sector pensions that put taxpayers on the 'ultimate financial hook.' Many infrastructure projects such as bridges, stadiums, sewers, public schools, government buildings and numerous other forms of 'creatively' debt financed public infrastructure as well, will end up in the taxpayers' lap down the road.
And sadly, many of those future paying taxpayers won't have had any say in the matter. Come to think of it, neither will many of their predecessors, aka current taxpayers.
Government debt and politics both suck. At all levels.
Wouldn't it be appropriate for We the People to insist on a whole lot greater transparency and accountability since it's our money, and that of our kids and grandkids, that's being wasted -- er -- invested by our 'public servants?'
That's my take.
Thanks. Bob.
As an example, government officials acknowledge ~$16 trillion in debt but choose not to talk about the other $100 trillion in unfunded entitlements.
At the state and local levels, however, there's not even an acknowledgement of the approximately $7.3 trillion in debt that for the most part has never been approved by taxpayers. Instead we all pretend that the various states and local municipalities balance their budgets each year. If that's the case, where did the $7.3 trillion liability originate?
So in the battle of the bad actors, who's worse? Is it the national politicians or is it the local and state crew? Well, it looks very much like a tie to me. They both suck in their fiduciary roles as our elected "public servants." Read on and see why that's the case.
The Debt Bomb That Taxpayers Won't See Coming is subtitled 'State and local government owe $7.3 trillion in promises they've made that were never approved by taxpayers:'
"Earlier this month, the Securities and Exchange Commission charged Illinois officials with making misleading statements to bond investors about the state's pension system. The agency detailed a long list of deceptive practices including failure to tell investors that the system was so underfunded that it risked bankruptcy.
Illinois taxpayers, as well as the holders of its debt, will ultimately bear the burden of the officials' misdeeds. But there is nothing unique about the Prairie State. For years, elected officials in states and municipalities across the country have been imprudently piling up obligations that are imposing serious strains on budgets, prompting higher taxes and cutbacks in services.
In January, city officials in Sacramento, California's capital, reported . . . that Sacramento had racked up some $2 billion in obligations (mostly pensions and retiree health care). All this for a municipality of 477,000 residents with an annual general fund budget of just $366 million. . . .
Illinois Gov. Pat Quinn
Servicing its debt in years to come will only add more woe, especially given the intractability of public unions. The budget report noted that "While reducing staff is clearly not the preferred method for reducing costs, the city has a very limited ability to reduce the cost of labor absent cooperation from the city's employee groups."
According to studies by the Pew Center on the States, states and the biggest cities have made nearly three-quarters of a trillion dollars in promises to pay for retiree health-care insurance. Yet governments have set aside only about 5% of the money they'll need to pay for these promises.
This year a Chicago city commission reported that retiree health-care expenditures would soar from $109 million in this year's budget to $541 million in a decade. After concluding that the expenditures were unaffordable, one member of the commission proposed that retirees be required to sign on to the Illinois Health Insurance Exchange being created under President Obama's Affordable Care Act. Health insurance would be cheaper if it is subsidized by the federal government.
A December report by the States Project, a joint venture of Harvard's Institute of Politics and the University of Pennsylvania's Fels Institute of Government, estimated that state and local governments now owe in sum a staggering $7.3 trillion. Incredibly, the vast majority of this debt has never been approved by taxpayers, who are often unaware of the extent of their obligations.
Most state constitutions and many municipal charters limit borrowing and mandate voter approval. No matter. Politicians evade the limits, issuing billions of dollars in municipal offerings never approved by voters, sometimes with disastrous consequences. Courts have rubber-stamped many of these schemes.
The debt incurred by New Jersey for school projects is a case in point. In 2001, legislators in Trenton hatched a scheme to borrow a shocking $8.6 billion for refurbishing school buildings. The reaction to their plan in the press and among taxpayer groups was so negative that the politicians knew that voters would never approve it. So the legislature created an independent borrowing authority. Since it, and not taxpayers, would take on the debt, politicians claimed that there was no need for voters' consent. . . .
New Jersey's Schools Construction Corp. quickly squandered half of the money on patronage and inefficient construction practices, so in 2005 the state borrowed another $3.9 billion. All of the debt is being repaid by taxpayers. The authority, which was dissolved several years ago, had no revenues of its own.
Next door, in New York, a scant 5% of the Empire State's $63 billion in outstanding debt has ever been authorized by voters, according to the state comptroller. The rest has been engineered through independent authorities such as the Transitional Finance Authority.
These authorities are designed to circumvent voters. Of the seven bond offerings that have gone before New York voters in the past 25 years, four have been defeated. But thanks to unsanctioned debt, New Yorkers bear the second-highest per capita debt burden in the nation, $3,258, according to a January report by the state comptroller. New Jersey is No. 1, at $3,964.
To prevent the pile-up of hidden debt, taxpayers need to spearhead a revolt that will narrow the ability of officials to mortgage their future. Any such revolt will first of all seek an end to government sponsored defined-benefit pension plans, through which politicians promise benefits years hence to current employees in a manner that potentially leaves taxpayers on the hook for unlimited liabilities. Simpler, defined-contribution plans featuring individual retirement accounts would make government pension systems less expensive and their accounting more transparent.
Similarly, reformers will have to rein in borrowing by independent authorities and other government entities created to circumvent current debt limits. No state or municipality should be allowed to issue any debt for which taxpayers are ultimately liable without voter approval.
Without such reforms, many states risk becoming like Illinois, where a $7 billion tax increase in 2011 was largely gobbled up by rising pension costs, leaving the state with a $9 billion backlog of unpaid bills and the prospect of new taxes to pay off its $271 billion in debt. This is a future in which rising taxes don't provide citizens new services but merely go to pay off hidden debts."
Summing Up
Whatever happened to the idea of representative democracy? Self government? No taxation without representation?
Well, for one thing, public sector unions happened. For another, the Democratic Party and those public sector unions have been scratching each other's back for a long time now. And for a third, taxpayers haven't been paying any attention to the bills of the future being incurred by the government knows best gang in the present and on their 'behalf.'
So it's not just public sector pensions that put taxpayers on the 'ultimate financial hook.' Many infrastructure projects such as bridges, stadiums, sewers, public schools, government buildings and numerous other forms of 'creatively' debt financed public infrastructure as well, will end up in the taxpayers' lap down the road.
And sadly, many of those future paying taxpayers won't have had any say in the matter. Come to think of it, neither will many of their predecessors, aka current taxpayers.
Government debt and politics both suck. At all levels.
Wouldn't it be appropriate for We the People to insist on a whole lot greater transparency and accountability since it's our money, and that of our kids and grandkids, that's being wasted -- er -- invested by our 'public servants?'
That's my take.
Thanks. Bob.
One More Stockton Bankruptcy Update ... Pensions at Risk But Clarity Lies Ahead for All Concerned
Public employee pension benefits are definitely at risk in the Stockton bankruptcy proceedings.
City bankruptcies loom over retiree plans describes the broader story as follows:
"A federal bankruptcy judge’s decision in California yesterday cleared the way for Stockton, Calif., to reorganize its finances through Chapter 9 bankruptcy. And employment experts will be watching the bankruptcy proceedings closely because of their potential impact on retirees – since the ruling, by Judge Christopher Klein, leaves open the possibility that Stockton could stop or reduce its payments to California’s public-employee pension plan. . . .
As Diana Marcum reports this week in the Los Angeles Times, Stockton’s single biggest debt is the $900 million it owes over the next decade to the California Public Employees’ Retirement System, or Calpers, which administers pension funds for most of the local governments in the state. Pension obligations are one of the biggest problems for most struggling municipal governments, and the issue in general puts federal bankruptcy law—which gives bankrupt institutions a lot of leeway in restructuring their finances—in tension with state laws (including California’s) that require pension funding to take precedence.
Klein’s ruling, which declares that Stockton is eligible for bankruptcy protection, looks on its surface like a win for the pension fund. . . . Stockton’s other creditors had urged Klein to dismiss the filing, arguing that the city could pay more to its bondholders if it reduced its payment to Calpers. But while Stockton can now proceed with designing a debt-restructuring plan, Klein said the city’s pension obligations would remain open to consideration in future negotiations. And it’s hardly a given that bankruptcy judges will stand up for the state’s pension laws: In a related case, another bankruptcy judge ruled that Calpers couldn’t sue another struggling city, San Bernardino to force it to keep up with monthly pension payments to the fund.
The Wall Street Journal’s Katy Stech reports today that if judges do ultimately relieve bankrupted governments of some of those pension obligations, it’ll encourage many more cities to file for bankruptcy. That would almost certainly mean cuts in retirement benefits for current and future public-sector workers, and perhaps for present retirees as well."
Summing Up
What happens in Stockton's bankruptcy case will probably establish an extremely important precedent for local and state governments, public employees, pensioners, bondholders and citizen taxpayers throughout America.
My own common sense view based on the law is that some reasonable agreement will be reached which will reduce pensions for future retirees but leave current benefits in place for those already in or near retirement.
At least that's the only logical and affordable solution that I see. And while such a 'solution' probably won't please many people, it at least will be 'implementable' and the most quasi-reasonable thing to do for all concerned.
Current and near retirees deserve to receive their promised pensions, and taxpayers and bondholders deserve to be treated equitably as well. Not like an uninvolved check writing rich uncle or unlimited disbursing ATM machine, in other words.
Accordingly, my guesstimate is that pension benefits will be reduced in the future (and perhaps even converted to a 401(k) plan), that employees will be required to contribute more, and that employees will also have to work more years to earn those benefits as well.
But of course, that's just my guess.
So now we will just have to wait to see what actually happens as the situation develops further both in Stockton and in many other American cities. But clarity for public sector pensions is definitely coming to America.
As a result, the enormous current uncertainty about Stockton's and other cities' various obligations, including the payment of employee pensions, will be coming to an end for retired and current workers, bondholders, public sector union officals, political leaders and citizen taxpayers as well.
That will prove to be a good thing for all concerned.
That's my take.
Thanks. Bob.
City bankruptcies loom over retiree plans describes the broader story as follows:
"A federal bankruptcy judge’s decision in California yesterday cleared the way for Stockton, Calif., to reorganize its finances through Chapter 9 bankruptcy. And employment experts will be watching the bankruptcy proceedings closely because of their potential impact on retirees – since the ruling, by Judge Christopher Klein, leaves open the possibility that Stockton could stop or reduce its payments to California’s public-employee pension plan. . . .
Klein’s ruling, which declares that Stockton is eligible for bankruptcy protection, looks on its surface like a win for the pension fund. . . . Stockton’s other creditors had urged Klein to dismiss the filing, arguing that the city could pay more to its bondholders if it reduced its payment to Calpers. But while Stockton can now proceed with designing a debt-restructuring plan, Klein said the city’s pension obligations would remain open to consideration in future negotiations. And it’s hardly a given that bankruptcy judges will stand up for the state’s pension laws: In a related case, another bankruptcy judge ruled that Calpers couldn’t sue another struggling city, San Bernardino to force it to keep up with monthly pension payments to the fund.
The Wall Street Journal’s Katy Stech reports today that if judges do ultimately relieve bankrupted governments of some of those pension obligations, it’ll encourage many more cities to file for bankruptcy. That would almost certainly mean cuts in retirement benefits for current and future public-sector workers, and perhaps for present retirees as well."
Summing Up
What happens in Stockton's bankruptcy case will probably establish an extremely important precedent for local and state governments, public employees, pensioners, bondholders and citizen taxpayers throughout America.
My own common sense view based on the law is that some reasonable agreement will be reached which will reduce pensions for future retirees but leave current benefits in place for those already in or near retirement.
At least that's the only logical and affordable solution that I see. And while such a 'solution' probably won't please many people, it at least will be 'implementable' and the most quasi-reasonable thing to do for all concerned.
Current and near retirees deserve to receive their promised pensions, and taxpayers and bondholders deserve to be treated equitably as well. Not like an uninvolved check writing rich uncle or unlimited disbursing ATM machine, in other words.
Accordingly, my guesstimate is that pension benefits will be reduced in the future (and perhaps even converted to a 401(k) plan), that employees will be required to contribute more, and that employees will also have to work more years to earn those benefits as well.
But of course, that's just my guess.
So now we will just have to wait to see what actually happens as the situation develops further both in Stockton and in many other American cities. But clarity for public sector pensions is definitely coming to America.
As a result, the enormous current uncertainty about Stockton's and other cities' various obligations, including the payment of employee pensions, will be coming to an end for retired and current workers, bondholders, public sector union officals, political leaders and citizen taxpayers as well.
That will prove to be a good thing for all concerned.
That's my take.
Thanks. Bob.
Tuesday, April 2, 2013
Dow and S&P 500 Both Set Records Today
Well, it finally happened.
Both the Dow and S&P 500 closed at record highs today.
Now we won't have to listen any longer to the "experts" predict when the market will reach new highs. That's a done deal.
Dow and S&P 500 finish at all-time closing highs has the breaking news:
"U.S. stocks gained Tuesday, with the Dow Jones Industrial Average and the S&P 500 both closing at record highs as health insurers rallied on Medicare-reimbursement news and U.S. factory orders rose in February.
"There are still some risks out there. But for the market to be at new highs here, based on where earnings are, and where economic growth is, it's reasonable," says Jim Dunigan, managing executive for investments at PNC Wealth Management.
At 4 p.m. Eastern, the Dow industrials rose 88.78 points, or 0.6%, to 14,661.94, with the blue-chip index topping the prior record hit late last week. The S&P 500 added 8.04 points, or 0.5%, to 1,570.21, its all-time closing high. The Nasdaq Composite rose 15.69 points, or 0.5%, to end at 3,254.86, with the technology-heavy index 1,793.76 points from its record-high finish of 5,048.62, set on March 10, 2000."
Summing Up
Now that that's over, we can all look forward to surpassing the inflation adjusted highs in another couple of years or so. That will take an additional ~20% increase in share prices.
And as for the NASDAQ, we could be in for a very long wait there. That bubble was a really huge one.
In any event, it's always nice to get to new highs and even nicer when prices keep climbing over time, which they do.
Thanks. Bob.
Both the Dow and S&P 500 closed at record highs today.
Now we won't have to listen any longer to the "experts" predict when the market will reach new highs. That's a done deal.
Dow and S&P 500 finish at all-time closing highs has the breaking news:
"U.S. stocks gained Tuesday, with the Dow Jones Industrial Average and the S&P 500 both closing at record highs as health insurers rallied on Medicare-reimbursement news and U.S. factory orders rose in February.
"There are still some risks out there. But for the market to be at new highs here, based on where earnings are, and where economic growth is, it's reasonable," says Jim Dunigan, managing executive for investments at PNC Wealth Management.
At 4 p.m. Eastern, the Dow industrials rose 88.78 points, or 0.6%, to 14,661.94, with the blue-chip index topping the prior record hit late last week. The S&P 500 added 8.04 points, or 0.5%, to 1,570.21, its all-time closing high. The Nasdaq Composite rose 15.69 points, or 0.5%, to end at 3,254.86, with the technology-heavy index 1,793.76 points from its record-high finish of 5,048.62, set on March 10, 2000."
Summing Up
Now that that's over, we can all look forward to surpassing the inflation adjusted highs in another couple of years or so. That will take an additional ~20% increase in share prices.
And as for the NASDAQ, we could be in for a very long wait there. That bubble was a really huge one.
In any event, it's always nice to get to new highs and even nicer when prices keep climbing over time, which they do.
Thanks. Bob.
More on Stockton's Bankruptcy ... Are the City's Creditors to be Treated Equally? ... If Not, How Unequally ... Is It 'Fair' for Pension Benefits of Public Employees to be Treated 'More Equally' Than the Rightful Claims of Bondholders? ... And What About Other Cities?
Bankruptcy is a proceeding whereby an entity's debts are restructured by the court in order that the institution can continue to operate with a reasonable chance at getting its act together and going forward as a solvent institution capable of paying its bills.
Municipal bankruptcies are rare, and defaulting on debts owed by cities simply doesn't happen. Not until now, that is. And that brings us to Stockton, California.
Stockton is broke. Stockton has incurred debts that it cannot repay and obligations that it cannot satisfy.
Stockton finances its city employees' pensions with the state agency Calpers (California Public Employees' Retirement System), as do other California cities. Calpers receives pension contributions from cities, invests those funds and then pays pension benefits to eligible retirees. Calpers is a huge big and politically powerful government entity.
The bondholders of Stockton are seeking to be treated equally with Calpers, something the city officials evidently have no intention of allowing.
Of course, many of the Stockton city officials are also active participants in the city's pension plan. It's an obvious conflict of interest for them to favor the employee pensions over the rights of bondholders, but that's precisely where the situation stands.
Enter the bankruptcy court.
Ruling Sets Up Pension Battle in Bankrupt City provides the overview of the case:
"A federal bankruptcy judge ruled on Monday that the city of Stockton, Calif., was eligible for court protection from its creditors, clearing the way for a battle over whether public workers’ pensions can be cut when the city they work for goes bankrupt.
After declaring Chapter 9 bankruptcy last year, Stockton eliminated tens of millions of dollars in city services and said it would cut some bond payments in a way unseen before in municipal bankruptcy. But bondholders objected to Stockton’s effort to protect pensions while forcing losses on investors.
Municipal experts and struggling cities in California and elsewhere have been closely watching the case to see whether a city's debt to its pension funds is immune from cuts imposed by a bankruptcy judge. A ruling against pension funds could inspire more cities to file for bankruptcy."
................................................................................
"That headline more or less sums up the message of federal bankruptcy Judge Christopher Klein's decision on Monday to allow Stockton, California, to proceed with Chapter 9 bankruptcy. The San Joaquin Valley city of 300,000 intends to use bankruptcy to stiff capital market creditors in order to pay for its workers' rich pensions, which will merely encourage other insolvent municipalities to do the same.
Stockton filed for bankruptcy last summer after a three-month confidential mediation with creditors failed to substantially reduce its long-term liabilities or close its $25 million deficit. Assured Guaranty and National Public Finance Guarantee, which insure about $260 million of the city's bond debt, pulled out of negotiations after the city council refused to haircut the city's single largest creditor, the California Public Employees' Retirement System (Calpers).
Meanwhile, the city was proposing to slash by 80% the $125 million in principal on pension obligation bonds that it had issued in 2007 to pay an overdue bill to Calpers. Never before has a bankrupt city reduced principal on its debt. In its Chapter 9 eligibility trial, Stockton nonetheless blamed bond insurers for negotiating in bad faith—an argument Judge Klein echoed in his ruling.
The city claimed that its workers and residents had already paid their fair share, and now it was time for the capital creditors to chip in. Yet the most significant concessions from labor involved cutting bonus pay for things like handling a canine (which pays an extra 9%). Many of these fringe benefits and pay categories were incorporated in informal side letters with unions and never approved by the city council.
Pensions for new workers were trimmed modestly, and the "Lamborghini" retiree health benefits—that's city council member Kathy Miller's description—entitling workers who had worked for merely six months to free lifetime medical are to be phased out. Yet as city officials attested, all of these "concessions" have merely brought the city into line with comparable cities—which are also slouching toward bankruptcy because of public employee pay and benefits.
The truth is that the only way Stockton can solve its financial problems in or outside of bankruptcy is to trim its $147 million unfunded pension liability. Pensions equal about 40% of its annual payroll costs. The average firefighter can retire at age 50 with an annuity equal to 90% of his highest year's salary, which until recently included various bonus pay categories, plus a cost-of-living adjustment.
So even though the city has cut its workforce by roughly a third, it still faced a $25 million deficit last year. And even if it defaults on the $200 million it owes in principal and interest on its pension obligation bonds, it projects a $100 million deficit over the next decade. That will likely increase since Calpers recently approved a 50% rate hike in municipalities' pension bills to fill its own liabilities hole.
Calpers insists that pensions are contracts protected under state and federal law. When the Bay Area suburb of Vallejo filed for Chapter 9 bankruptcy in 2008, Calpers threatened to tie the city up in court if it even tried to cut pensions. Never mind that the express purpose of bankruptcy is to break and restructure contracts.
Stockton never sought to restructure pension benefits and never approached Calpers during mediation. Perhaps city officials figure union-dominated Calpers is too politically powerful to take on, but it's also true that their own pensions are at stake in any restructuring.
All of which leaves the city's bondholders as the likeliest targets. Creditors who thought that lending to cities was a risk-free exercise are learning the ugly reality of modern public-union politics. Unions have the power, and their view is that their benefits are forever and your contracts are negotiable."
Summing Up
There comes a time when federal bankruptcy laws, state constitutions, political judgments and financial practicalities collide.
Such a time has come to Stockton and is headed for lots of other American cities as well. For that matter, our federal government's system of unaffordable entitlements is at considerable risk as well.
We simply don't have enough money to make good on all the promises government officials have made in the past. And using 40% of Stockton's payroll for city workers' pensions doesn't make any sense at all.
But then, neither does it make sense to ruin the city's chances to borrow money in the future at anything approaching reasonable borrowing terms. And that's exactly what will happen if Calpers is left out of the inevitable "haircutting" and placed ahead of Stockton's bondholders.
So this case has a long and difficult road ahead.
And in the end, its resolution may well serve as a clear signal to other cities, public employees, unions, bondholders and state and federal legislators.
This leaves lots of problems for one federal bankruptcy judge to address. But Judge Klein will undoubtedly receive "lots of help" along the way by the various interested parties, including politicians, unions, employees, citizens and bondholders.
Municipal bankruptcies are rare, and defaulting on debts owed by cities simply doesn't happen. Not until now, that is. And that brings us to Stockton, California.
Stockton is broke. Stockton has incurred debts that it cannot repay and obligations that it cannot satisfy.
Stockton finances its city employees' pensions with the state agency Calpers (California Public Employees' Retirement System), as do other California cities. Calpers receives pension contributions from cities, invests those funds and then pays pension benefits to eligible retirees. Calpers is a huge big and politically powerful government entity.
The bondholders of Stockton are seeking to be treated equally with Calpers, something the city officials evidently have no intention of allowing.
Of course, many of the Stockton city officials are also active participants in the city's pension plan. It's an obvious conflict of interest for them to favor the employee pensions over the rights of bondholders, but that's precisely where the situation stands.
Enter the bankruptcy court.
Ruling Sets Up Pension Battle in Bankrupt City provides the overview of the case:
Downtown Stockton, Calif. A bankruptcy judge said the city’s police force and fire department had been cut to their safe limit.
After declaring Chapter 9 bankruptcy last year, Stockton eliminated tens of millions of dollars in city services and said it would cut some bond payments in a way unseen before in municipal bankruptcy. But bondholders objected to Stockton’s effort to protect pensions while forcing losses on investors.
Many states have statutes and constitutional provisions making it illegal to cut public workers’ pensions. Until now, there has not been a prominent test of those laws in bankruptcy — particularly not in California, where the big state pension system, known as Calpers, has been girding for battle on the issue, trying to avoid the precedent of a cutoff or shortfall in a city’s pension contributions.
Federal bankruptcy law often trumps state laws, but municipal bankruptcies are so rare that there is almost no precedent on how to apply the law to state pension provisions.
In the ruling, issued on Monday in Sacramento, which affirmed the legal status of Stockton’s bankruptcy, Judge Christopher M. Klein said he could see battle lines being drawn between Calpers — formally the California Public Employees’ Retirement System — and the city’s other major creditors, including several Wall Street companies that either bought Stockton’s bonds or insured them. But he ruled that it was still too early in the case for that battle to be joined.
“There are very complex and difficult questions of law that I can see out there on the horizon,” he said.
The judge said he would decide those questions during the next phase of Stockton’s bankruptcy, in which the city’s creditors will contest whether its so-called plan of adjustment is fair. A plan of adjustment in a municipal bankruptcy is comparable to a plan of reorganization in a Chapter 11 bankruptcy; a city cannot emerge from bankruptcy unless the judge confirms its plan of adjustment.
“The day of reckoning will be the day of plan confirmation,” Judge Klein said near the end of a two-hour session in which he read his decision. “The city is going to have a difficult time confirming a plan over the objection of unfair discrimination.”"
..............................................................................
So exactly what's at stake in the Stockton case? California City's Bankruptcy Poses Risk to Pensions says this in part:
"Stockton, which had $700 million in bond debt and faced a $26 million annual budget shortfall when it filed for bankruptcy, also could become one of the first municipalities to use bankruptcy protection to force bondholders to take less than the principal they are owed. Two other areas operating under Chapter 9 protection, San Bernardino and Jefferson County, Ala., are also trying to negotiate such concessions from their bondholders.
Bondholder groups have argued that Stockton was unfairly trying to use bankruptcy to cut debt payments while leaving untouched its obligations to the California Public Employees' Retirement System, or Calpers, which holds city workers' retirement money.
Municipal experts and struggling cities in California and elsewhere have been closely watching the case to see whether a city's debt to its pension funds is immune from cuts imposed by a bankruptcy judge. A ruling against pension funds could inspire more cities to file for bankruptcy."
................................................................................
And a claim of 'unfair discrimination' will be made by every interested party in the bankruptcy proceeding, including pensioners, citizens who are being denied adequate city services, current employees, Calpers, and bondholders. But it's the bondholders who most likely will be shortchanged by the city in its 'plan of adjustment.'
Then the bankruptcy judge will be asked to approve that plan, and that's where the claims of 'unfair discrimination' will be adjudicated. In federal bankruptcy court.
Bondholders Beware takes the position that 'Stockton will use bankruptcy to skin lenders, not pensioners:'
Stockton filed for bankruptcy last summer after a three-month confidential mediation with creditors failed to substantially reduce its long-term liabilities or close its $25 million deficit. Assured Guaranty and National Public Finance Guarantee, which insure about $260 million of the city's bond debt, pulled out of negotiations after the city council refused to haircut the city's single largest creditor, the California Public Employees' Retirement System (Calpers).
Meanwhile, the city was proposing to slash by 80% the $125 million in principal on pension obligation bonds that it had issued in 2007 to pay an overdue bill to Calpers. Never before has a bankrupt city reduced principal on its debt. In its Chapter 9 eligibility trial, Stockton nonetheless blamed bond insurers for negotiating in bad faith—an argument Judge Klein echoed in his ruling.
The city claimed that its workers and residents had already paid their fair share, and now it was time for the capital creditors to chip in. Yet the most significant concessions from labor involved cutting bonus pay for things like handling a canine (which pays an extra 9%). Many of these fringe benefits and pay categories were incorporated in informal side letters with unions and never approved by the city council.
Pensions for new workers were trimmed modestly, and the "Lamborghini" retiree health benefits—that's city council member Kathy Miller's description—entitling workers who had worked for merely six months to free lifetime medical are to be phased out. Yet as city officials attested, all of these "concessions" have merely brought the city into line with comparable cities—which are also slouching toward bankruptcy because of public employee pay and benefits.
The truth is that the only way Stockton can solve its financial problems in or outside of bankruptcy is to trim its $147 million unfunded pension liability. Pensions equal about 40% of its annual payroll costs. The average firefighter can retire at age 50 with an annuity equal to 90% of his highest year's salary, which until recently included various bonus pay categories, plus a cost-of-living adjustment.
So even though the city has cut its workforce by roughly a third, it still faced a $25 million deficit last year. And even if it defaults on the $200 million it owes in principal and interest on its pension obligation bonds, it projects a $100 million deficit over the next decade. That will likely increase since Calpers recently approved a 50% rate hike in municipalities' pension bills to fill its own liabilities hole.
Calpers insists that pensions are contracts protected under state and federal law. When the Bay Area suburb of Vallejo filed for Chapter 9 bankruptcy in 2008, Calpers threatened to tie the city up in court if it even tried to cut pensions. Never mind that the express purpose of bankruptcy is to break and restructure contracts.
Stockton never sought to restructure pension benefits and never approached Calpers during mediation. Perhaps city officials figure union-dominated Calpers is too politically powerful to take on, but it's also true that their own pensions are at stake in any restructuring.
All of which leaves the city's bondholders as the likeliest targets. Creditors who thought that lending to cities was a risk-free exercise are learning the ugly reality of modern public-union politics. Unions have the power, and their view is that their benefits are forever and your contracts are negotiable."
Summing Up
There comes a time when federal bankruptcy laws, state constitutions, political judgments and financial practicalities collide.
Such a time has come to Stockton and is headed for lots of other American cities as well. For that matter, our federal government's system of unaffordable entitlements is at considerable risk as well.
We simply don't have enough money to make good on all the promises government officials have made in the past. And using 40% of Stockton's payroll for city workers' pensions doesn't make any sense at all.
But then, neither does it make sense to ruin the city's chances to borrow money in the future at anything approaching reasonable borrowing terms. And that's exactly what will happen if Calpers is left out of the inevitable "haircutting" and placed ahead of Stockton's bondholders.
So this case has a long and difficult road ahead.
And in the end, its resolution may well serve as a clear signal to other cities, public employees, unions, bondholders and state and federal legislators.
This leaves lots of problems for one federal bankruptcy judge to address. But Judge Klein will undoubtedly receive "lots of help" along the way by the various interested parties, including politicians, unions, employees, citizens and bondholders.
It's going to be a biggie and will say a whole lot about the power of public sector unions versus the rights of taxpayers and other providers of public funds, including bondholders.
Stay tuned.
Thanks. Bob.
Thanks. Bob.
Monday, April 1, 2013
Stockton's Bankruptcy Allowed to Proceed ... Could Be a Huge Case for Pensioners, Creditors and Other Claimants
This news just in this afternoon. A judge has approved Stockton, California's petition for bankruptcy.
Creditors, pensioners, employees and taxpayers all have a vested interest in the eventual outcome, and the case could be an important benchmark for cities throughout the nation.
Judge Allows Stockton, Calif., to Enter Bankruptcy has the breaking news:
"Stockton, Calif., successfully fought off Wall Street creditors for the power to restructure its debt in Chapter 9 bankruptcy, but a bankruptcy judge signaled the city may have to find financial stability in an unprecedented place: its pension fund.
At a court hearing Monday, Judge Christopher Klein of the U.S. Bankruptcy Court in Sacramento refused to dismiss the city's Chapter 9 case, saying that it "will not be able to perform its obligations to its citizens relating to such fundamental matters as public safety, as well as other basic governmental services, without the ability to have the muscle of the contract-impairing power of federal bankruptcy law.". . .
During a three-day trial last week, bondholder groups asked Judge Klein to dismiss the case, arguing that the city was unfairly trying to use bankruptcy to cut its debt payments while leaving its obligations to the California Public Employees' Retirement System—which holds city workers' retirement money—untouched.
Calpers, which handles pension benefits for the state's 1.6 million public employees and retirees, is scheduled to collect hundreds of millions of dollars from Stockton over the next decade.
Municipal experts and other struggling California cities are closely watching Stockton's case to see whether a city's debt to Calpers is immune from cuts imposed by a bankruptcy judge.
Judge Klein disagreed that bondholders were being unfairly targeted, but he said the group could try to block the city's debt-restructuring plan.
"The city is going to have a difficult time confirming a plan over an objection and claim of unfair discrimination without being able to explain that problem away," Judge Klein said Monday.
Bondholder groups have said that, while Stockton's bond payments account for roughly 7% of the city's budget, city leaders have asked for concessions valued at 44%. Attorneys for the bondholders argued that the city can't use federal bankruptcy protection to target some creditors, but not others.
Before the trial, Assured Guaranty Corp., the insurer of $161 million of the city's debt, and others scrutinized the city's finances, suggesting that it sell buildings such as its City Hall, the Bob Hope Theatre and the Stockton Events Center while raising taxes on utilities, tourists and those who make emergency 911 phone calls, according to earlier court papers.
But Stockton attorneys argued the city already imposed harsh cuts on its departments and its roughly 1,300 workers in recent years. Weakening pension benefits, they argued, could scare off police officers during a time of record crime.
City attorneys have said Stockton, which ranks as one of the state's most dangerous cities, employs about 1.2 police officers for every 1,000 residents—a ratio that's almost half of what's recommended by a national study.
"When Stockton should be adding to its police force, it cannot impair its pension…and run the fatal risk of [an] even tougher recruitment problem," said Stockton bankruptcy attorney Norman Hile during the trial.
Judge Klein's ruling that Stockton is eligible for Chapter 9 protection marks a major milestone for the city, which could become the first municipality to use bankruptcy protection to force bondholders to take less than the principal they are owed. Two other areas operating under Chapter 9 protection—658,000-resident Jefferson County in Alabama and 210,000-resident San Bernardino in California—are also trying to negotiate concessions from bondholders.
Unlike corporations that seek Chapter 11 protection, cities that file for Chapter 9 have to prove that their leaders first followed steps set forth by the Bankruptcy Code—a requirement that often gives creditors who face harsh cuts during a city's bankruptcy the chance to object.
In the past, challengers have been successful; nearly one-third of the roughly 260 municipal bankruptcy cases filed since 1980 have been thrown out, according to figures kept by the Chapman and Cutler LLP law firm in Chicago.
Stockton's leaders are expected to begin putting together a reorganization plan for the city, which would have to be approved by Judge Klein."
Summing Up
It ain't over 'til it's over, or at least until the fat lady sings, and this one ain't over by a long shot.
Since retirees, current employees, citizens' rights to have adequate city services, bondholders' rights to equal treatment with other creditors, and many other city obligations are all legitimate claims against the bankrupt city, which they are, something's gotta give.
Stockton officials have overpromised and now all the claimants want fair and equal treatment. In fact, some think it's only fair that they be treated more equally than others.
But the money is not there to do all that's been promised.
We'll all watch attentively as this case unfolds. The is one bankruptcy proceeding that won't be boring. It's going to be a thriller and perhaps a national precedent setter as well.
So stay tuned. The battle has only just begun.
Thanks. Bob.
Creditors, pensioners, employees and taxpayers all have a vested interest in the eventual outcome, and the case could be an important benchmark for cities throughout the nation.
Judge Allows Stockton, Calif., to Enter Bankruptcy has the breaking news:
"Stockton, Calif., successfully fought off Wall Street creditors for the power to restructure its debt in Chapter 9 bankruptcy, but a bankruptcy judge signaled the city may have to find financial stability in an unprecedented place: its pension fund.
At a court hearing Monday, Judge Christopher Klein of the U.S. Bankruptcy Court in Sacramento refused to dismiss the city's Chapter 9 case, saying that it "will not be able to perform its obligations to its citizens relating to such fundamental matters as public safety, as well as other basic governmental services, without the ability to have the muscle of the contract-impairing power of federal bankruptcy law.". . .
During a three-day trial last week, bondholder groups asked Judge Klein to dismiss the case, arguing that the city was unfairly trying to use bankruptcy to cut its debt payments while leaving its obligations to the California Public Employees' Retirement System—which holds city workers' retirement money—untouched.
Calpers, which handles pension benefits for the state's 1.6 million public employees and retirees, is scheduled to collect hundreds of millions of dollars from Stockton over the next decade.
Municipal experts and other struggling California cities are closely watching Stockton's case to see whether a city's debt to Calpers is immune from cuts imposed by a bankruptcy judge.
Judge Klein disagreed that bondholders were being unfairly targeted, but he said the group could try to block the city's debt-restructuring plan.
"The city is going to have a difficult time confirming a plan over an objection and claim of unfair discrimination without being able to explain that problem away," Judge Klein said Monday.
Bondholder groups have said that, while Stockton's bond payments account for roughly 7% of the city's budget, city leaders have asked for concessions valued at 44%. Attorneys for the bondholders argued that the city can't use federal bankruptcy protection to target some creditors, but not others.
Before the trial, Assured Guaranty Corp., the insurer of $161 million of the city's debt, and others scrutinized the city's finances, suggesting that it sell buildings such as its City Hall, the Bob Hope Theatre and the Stockton Events Center while raising taxes on utilities, tourists and those who make emergency 911 phone calls, according to earlier court papers.
But Stockton attorneys argued the city already imposed harsh cuts on its departments and its roughly 1,300 workers in recent years. Weakening pension benefits, they argued, could scare off police officers during a time of record crime.
City attorneys have said Stockton, which ranks as one of the state's most dangerous cities, employs about 1.2 police officers for every 1,000 residents—a ratio that's almost half of what's recommended by a national study.
"When Stockton should be adding to its police force, it cannot impair its pension…and run the fatal risk of [an] even tougher recruitment problem," said Stockton bankruptcy attorney Norman Hile during the trial.
Judge Klein's ruling that Stockton is eligible for Chapter 9 protection marks a major milestone for the city, which could become the first municipality to use bankruptcy protection to force bondholders to take less than the principal they are owed. Two other areas operating under Chapter 9 protection—658,000-resident Jefferson County in Alabama and 210,000-resident San Bernardino in California—are also trying to negotiate concessions from bondholders.
Unlike corporations that seek Chapter 11 protection, cities that file for Chapter 9 have to prove that their leaders first followed steps set forth by the Bankruptcy Code—a requirement that often gives creditors who face harsh cuts during a city's bankruptcy the chance to object.
In the past, challengers have been successful; nearly one-third of the roughly 260 municipal bankruptcy cases filed since 1980 have been thrown out, according to figures kept by the Chapman and Cutler LLP law firm in Chicago.
Stockton's leaders are expected to begin putting together a reorganization plan for the city, which would have to be approved by Judge Klein."
Summing Up
It ain't over 'til it's over, or at least until the fat lady sings, and this one ain't over by a long shot.
Since retirees, current employees, citizens' rights to have adequate city services, bondholders' rights to equal treatment with other creditors, and many other city obligations are all legitimate claims against the bankrupt city, which they are, something's gotta give.
Stockton officials have overpromised and now all the claimants want fair and equal treatment. In fact, some think it's only fair that they be treated more equally than others.
But the money is not there to do all that's been promised.
We'll all watch attentively as this case unfolds. The is one bankruptcy proceeding that won't be boring. It's going to be a thriller and perhaps a national precedent setter as well.
So stay tuned. The battle has only just begun.
Thanks. Bob.
Lower Gasoline Prices Will Help Consumers and Businesses Alike
Despite government policy, gasoline prices are trending down. That's good for both consumers and businesses.
Just think how much better things would be if government policy somehow shifted toward economic growth and energy independence. Oh well, such is life.
Lower Gas Prices Off Some Much-Needed Relief says this:
"Few saw this coming a month ago.
Gas prices have dropped from pretty high levels over the past few weeks, offering some relief to consumers who are grappling with higher taxes.
The national average price of gasoline last month fell 15 cents, or 3.9%, to $3.63 a gallon, the first drop in March in 10 years, according to the Automobile Association of America. Prices are 29 cents lower from where they were at this time a year ago.
Gas prices usually rise at this time of year ahead of the peak, summer driving season. In 2013, prices have already swung wildly.
At one point, prices rose for 36 straight days, the longest stretch of consecutive increases in almost two years. Since peaking on Feb. 27 at $3.79 a gallon, gas prices have fallen in 29 of the past 33 days, AAA says.
The good news is AAA expects gas prices to remain less expensive than they have been in recent years, largely because oil is cheaper and refinery production is rising.
“AAA has no record of gas prices ever peaking in February, and it is too early to say whether prices may have hit a high for the first half of the year,” Ash said. “While it is possible that gas prices may surge briefly again this spring, the national average should remain less than last year’s high of $3.94 per gallon.""
Just think how much better things would be if government policy somehow shifted toward economic growth and energy independence. Oh well, such is life.
Lower Gas Prices Off Some Much-Needed Relief says this:
"Few saw this coming a month ago.
Gas prices have dropped from pretty high levels over the past few weeks, offering some relief to consumers who are grappling with higher taxes.
The national average price of gasoline last month fell 15 cents, or 3.9%, to $3.63 a gallon, the first drop in March in 10 years, according to the Automobile Association of America. Prices are 29 cents lower from where they were at this time a year ago.
“It is very unusual for gas prices to decline in early spring like we have seen this year,” AAA spokesman Avery Ash said in a statement. “An increase in refinery production and lower oil prices in early March have combined to provide rare falling prices for motorists in comparison to recent years.”
Gas prices usually rise at this time of year ahead of the peak, summer driving season. In 2013, prices have already swung wildly.
At one point, prices rose for 36 straight days, the longest stretch of consecutive increases in almost two years. Since peaking on Feb. 27 at $3.79 a gallon, gas prices have fallen in 29 of the past 33 days, AAA says.
The good news is AAA expects gas prices to remain less expensive than they have been in recent years, largely because oil is cheaper and refinery production is rising.
“AAA has no record of gas prices ever peaking in February, and it is too early to say whether prices may have hit a high for the first half of the year,” Ash said. “While it is possible that gas prices may surge briefly again this spring, the national average should remain less than last year’s high of $3.94 per gallon.""
Summing Up
Gas prices should keep coming down this spring, perhaps both in absolute terms as well as relative to prior year levels.
If so, perhaps the summer driving season will not result in price spikes.
And that price decline would be a virtual certainty if President Obama decides to get with the program by approving the construction of the Keystone XL Pipeline, approves additional domestic drilling, and then tops it all off by agreeing to the unlimited exporting of our abundant natural gas supplies.
In other words, all he has to do is what's best for America --- let the free market and free people go to work.
That's my take.
Thanks. Bob.
Where the Jobs Are Being Created is Hardly a Surprise
Jobs are growing unevenly through the U.S., and they're growing where we would expect them to grow.
I wonder if the government knows best gang that is so 'focused' on saving the middle class is paying any attention to all this activity in Texas. It sure doesn't seem so.
Maybe it's only that portion of the middle class that works in the government sector that they're trying so hard to save. But even if that's the case, somebody still has to create the wealth in the private sector to pay for all the government's spending in the public sector. Unless we want to see just how much the Chinese will lend us before finally cutting off the credit spigot, that is.
Hiring Spreads, but Only 14 Cities Top Prerecession Level describes the situation this way:
"Employers are hiring more readily across the U.S., though only 14 of the nation's 100 biggest metropolitan areas have more jobs now than they did before the 2008-09 recession.
Six of them are in Texas . . . . All of the 14 appear to have benefited in some way from a stable employment base, anchored by either universities, government agencies or high-tech hubs, helping residents avoid the worst of the job losses suffered by other areas. . . .
Robust employment in the oil and gas industries helped the Texas cities, although data from the Texas Workforce Commission suggests the job recovery has come from a variety of industries. Austin, San Antonio, El Paso, McAllen, Dallas and Houston all made the list, along with Oklahoma City, another energy town. The other cities on the list of 14 are: Omaha, Neb., Salt Lake City, Pittsburgh, San Jose, Calif., Knoxville, Tenn., Washington and Charleston, S.C.
Nationally, there were 3 fewer million jobs in February, or 2% less than when employment peaked in January 2008.
"Texas has been a bright spot in the recession. Its housing market wasn't hit as hard," said Alec Friedhoff, a senior research analyst at Brookings, a Washington think tank. "The oil-and-gas industry has been a great boon for that part of the country."
Texas has added jobs every month since January 2010, according to the Texas Workforce Commission. On Friday, the agency reported that Texas has added almost 360,000 nonfarm jobs since February 2012 on a seasonally adjusted basis, with gains in hospitality, government and manufacturing jobs, among others. The unemployment rate in Texas in February was 6.4%, significantly below the 7.7% national average.
Austin added more jobs, percentage-wise, than any other metro area, helped by stable employment at the state government and University of Texas as well as high-tech jobs. . . .
Despite showing strong job growth, a few metro areas could be disproportionately affected in the months ahead by automatic government spending cuts. Washington, and Charleston, in particular, could be hurt by job losses since they're home to large numbers of military families and contractors. The state of Virginia recently estimated it could lose more than 160,000 jobs as a result of the government and military spending cuts over the next few years.
The Labor Department said Friday that unemployment rates fell in February from January's levels in 22 states, increased in 12 and was unchanged in 16 plus the District of Columbia. Employment increased in 42 states and fell in 8 plus the District of Columbia."
Summing Up
Counting Oklahoma City, exactly 50% of the 14 job creating cities in the 100 largest metropolitan U.S. are energy centric. The remaining 86 areas still don't have their employment levels back to the prerecession levels of 2008-09.
Well, at least we know one sure fire formula for creating new jobs on a sustainable basis.
Maybe someday we'll get around to using it aggressively.
Besides the added income for individuals from new employment, our government could use the additional tax revenues, and other businesses could benefit from the additional economic activity.
Throw in increased consumer demand and lower energy costs, and then we'd see even more jobs being created across the nation. A virtuous circle.
Politics sucks.
Thanks. Bob.
I wonder if the government knows best gang that is so 'focused' on saving the middle class is paying any attention to all this activity in Texas. It sure doesn't seem so.
Maybe it's only that portion of the middle class that works in the government sector that they're trying so hard to save. But even if that's the case, somebody still has to create the wealth in the private sector to pay for all the government's spending in the public sector. Unless we want to see just how much the Chinese will lend us before finally cutting off the credit spigot, that is.
Hiring Spreads, but Only 14 Cities Top Prerecession Level describes the situation this way:
"Employers are hiring more readily across the U.S., though only 14 of the nation's 100 biggest metropolitan areas have more jobs now than they did before the 2008-09 recession.
Six of them are in Texas . . . . All of the 14 appear to have benefited in some way from a stable employment base, anchored by either universities, government agencies or high-tech hubs, helping residents avoid the worst of the job losses suffered by other areas. . . .
Job seekers at a March 19 energy industry fair in San
Antonio.
Robust employment in the oil and gas industries helped the Texas cities, although data from the Texas Workforce Commission suggests the job recovery has come from a variety of industries. Austin, San Antonio, El Paso, McAllen, Dallas and Houston all made the list, along with Oklahoma City, another energy town. The other cities on the list of 14 are: Omaha, Neb., Salt Lake City, Pittsburgh, San Jose, Calif., Knoxville, Tenn., Washington and Charleston, S.C.
Nationally, there were 3 fewer million jobs in February, or 2% less than when employment peaked in January 2008.
"Texas has been a bright spot in the recession. Its housing market wasn't hit as hard," said Alec Friedhoff, a senior research analyst at Brookings, a Washington think tank. "The oil-and-gas industry has been a great boon for that part of the country."
Texas has added jobs every month since January 2010, according to the Texas Workforce Commission. On Friday, the agency reported that Texas has added almost 360,000 nonfarm jobs since February 2012 on a seasonally adjusted basis, with gains in hospitality, government and manufacturing jobs, among others. The unemployment rate in Texas in February was 6.4%, significantly below the 7.7% national average.
Austin added more jobs, percentage-wise, than any other metro area, helped by stable employment at the state government and University of Texas as well as high-tech jobs. . . .
Despite showing strong job growth, a few metro areas could be disproportionately affected in the months ahead by automatic government spending cuts. Washington, and Charleston, in particular, could be hurt by job losses since they're home to large numbers of military families and contractors. The state of Virginia recently estimated it could lose more than 160,000 jobs as a result of the government and military spending cuts over the next few years.
The Labor Department said Friday that unemployment rates fell in February from January's levels in 22 states, increased in 12 and was unchanged in 16 plus the District of Columbia. Employment increased in 42 states and fell in 8 plus the District of Columbia."
Summing Up
Counting Oklahoma City, exactly 50% of the 14 job creating cities in the 100 largest metropolitan U.S. are energy centric. The remaining 86 areas still don't have their employment levels back to the prerecession levels of 2008-09.
Well, at least we know one sure fire formula for creating new jobs on a sustainable basis.
Maybe someday we'll get around to using it aggressively.
Besides the added income for individuals from new employment, our government could use the additional tax revenues, and other businesses could benefit from the additional economic activity.
Throw in increased consumer demand and lower energy costs, and then we'd see even more jobs being created across the nation. A virtuous circle.
Politics sucks.
Thanks. Bob.
Government Knows Best in Action ... You Can't Make This Stuff Up!
The government knows best gang continually does amazing things.
Their ability to waste taxpayer money and achieve unintended and frequently undesirable outcomes is incredible.
Consider the state of New York's latest venture into the world of OPM 'doing good things' with other people's money way of 'public service.'
Minimum Intelligence is subtitled 'Boys in Albany outdo themselves:'
". . . get a load of the latest economic policy breakthrough in New York. As their political price for agreeing to Governor Andrew Cuomo's minimum wage increase, Republicans who run the state Senate have insisted on a new tax credit for businesses that hire teenagers.
Under Albany's budget deal, the minimum wage will rise to $9 from $7.25 an hour over the next three years. Businesses will receive tax credits that fully offset the increased cost for every teen they employ at the minimum wage next year. However, by 2016 the tax credit will only cover about 75% of the additional cost for teen employees—and nothing for adult workers.
Liberals who had supported the wage hike are now howling that the "compromise" wrought between Republicans and Democrats will merely encourage businesses to replace adult workers, many of them minorities, with teens from well-to-do families. The deal will also create both a wage ceiling and wage floor for teens because employers lose the credit if they increase pay above the minimum wage. The state estimates the tax credit for businesses will cost $20 million to $40 million annually, though that doesn't include the higher labor costs that businesses will pass onto consumers.
In other words, the deal manages to punish employers who will pay more for workers they hire, workers who won't be hired because they're priced out of the labor market, and taxpayers who will foot the bill for subsidizing business. Even if Republicans weren't willing to oppose the higher minimum wage because it does well in the polls, couldn't they have at least insisted on a teenage exclusion or sub-minimum wage?
That was a rhetorical question."
Summing Up
Now that's bipartisanship in action as the popular polling minimum wage increased is legislated in New York. Of course, that makes for a nice 'bipartisan' political headline.
But if we bother to look beyond the headline, it's just another reminder of why politics sucks.
And why what the government knows best gang does is so expensive for We the People.
The law of unintended consequences is alive and well in New York.
And the rest of the country and world, too.
Thanks. Bob.
Their ability to waste taxpayer money and achieve unintended and frequently undesirable outcomes is incredible.
Consider the state of New York's latest venture into the world of OPM 'doing good things' with other people's money way of 'public service.'
Minimum Intelligence is subtitled 'Boys in Albany outdo themselves:'
". . . get a load of the latest economic policy breakthrough in New York. As their political price for agreeing to Governor Andrew Cuomo's minimum wage increase, Republicans who run the state Senate have insisted on a new tax credit for businesses that hire teenagers.
Under Albany's budget deal, the minimum wage will rise to $9 from $7.25 an hour over the next three years. Businesses will receive tax credits that fully offset the increased cost for every teen they employ at the minimum wage next year. However, by 2016 the tax credit will only cover about 75% of the additional cost for teen employees—and nothing for adult workers.
Liberals who had supported the wage hike are now howling that the "compromise" wrought between Republicans and Democrats will merely encourage businesses to replace adult workers, many of them minorities, with teens from well-to-do families. The deal will also create both a wage ceiling and wage floor for teens because employers lose the credit if they increase pay above the minimum wage. The state estimates the tax credit for businesses will cost $20 million to $40 million annually, though that doesn't include the higher labor costs that businesses will pass onto consumers.
In other words, the deal manages to punish employers who will pay more for workers they hire, workers who won't be hired because they're priced out of the labor market, and taxpayers who will foot the bill for subsidizing business. Even if Republicans weren't willing to oppose the higher minimum wage because it does well in the polls, couldn't they have at least insisted on a teenage exclusion or sub-minimum wage?
That was a rhetorical question."
Summing Up
Now that's bipartisanship in action as the popular polling minimum wage increased is legislated in New York. Of course, that makes for a nice 'bipartisan' political headline.
But if we bother to look beyond the headline, it's just another reminder of why politics sucks.
And why what the government knows best gang does is so expensive for We the People.
The law of unintended consequences is alive and well in New York.
And the rest of the country and world, too.
Thanks. Bob.
Preview of Economic Reports This Week ... Should See More Signs of Slow and Steady Improvement
This week's economic news will be highlighted by the nation's unemployment report on Friday.
Preceding the monthly unemployment report, several other important announcements concerning the economic health of our country will be issued during the week as well, beginning with business conditions as reported by the Institute on Supply Management (ISM) this morning.
The march in jobs continues, but how long? has the preview of the week's economic news:
"A pile of evidence suggests the U.S. economy hit the accelerator in early 2013 . . . . Economists polled by MarketWatch estimate the U.S. added nearly 200,000 jobs last month, reflecting the upturn in hiring that’s taken place since late last year.
The March employment report on Friday is this week’s economic special, but a pair of indexes that take measure of the manufacturing and service industries are on the main menu. Both of those indexes have also pointed to improved hiring trends in the private sector over the past few months.
Another 200,000 or so gain in hiring would lend further support to the idea that the economy is finally getting out of the quicksand and back onto solid ground after more than three years of muddy and uneven results.
Yet it will take a lot more positive data to cement the view that the start-and-stop recovery is about to enter a higher phase. The U.S. has generated a burst of job growth in each of the past two years, only to see hiring soften by midyear as key sectors of the economy faltered.
Higher taxes and gasoline prices, a still-soft global economy and divided government in Washington all pose threats to growth in the months ahead. U.S. lawmakers, for instance, are still at odds over tax, spending and debt policy. . . .
“What we don’t know is what’s going to happen as the effects of the sequester kick in and there is a hit to [worker] earnings,” said chief economist Richard Moody of Regions Financial. “And there’s still a lot of fiscal policy uncertainty — we seem drift from one crisis to another.”
The outlook on hiring will be partially colored in on Monday through a poll of manufacturing executives by the Institute for Supply Management. The ISM queries the executives who purchase supplies for their companies to find out how their firms are doing.
The ISM survey for March is forecast to hold steady near February’s level of
54.2%, a relatively healthy number that signals businesses continue to expand.
The index has climbed three straight months after sinking to a three-year low.
“U.S. manufacturing appears to be improving once again, after faltering in the middle part of 2012,” noted economist Andrew Grantham at CIBC World Markets. . . .
The overall ISM services index, meanwhile, is projected to dip slightly to 55.8% in March from a relatively robust 56% in the prior month. The index is issued Wednesday.
The ISM lead-ins will give way on Friday to the March jobs report.
The MarketWatch poll of economists projects a 193,000 net gain and a 200,000-plus number if government is excluded. . . .
The same pattern of surging job growth occurred in 2012 and 2011, only to fizzle out. Yet a growing number of economists think this time is different.
For one thing, consumers have sharply reduced household debt, and by one measure it’s at the lowest level since at least 1980. A buoyant stock market and rising home prices are also adding to household net worth.
Perhaps more important is the wild card of housing. In each of the past two years, housing was a drag on the economy early in the year. That’s not the case in 2013. The industry is on the upswing after its worst slump in modern times.
“A resurgent housing market is the main difference between this year’s upturn in labor market conditions and the false starts of 2011 and 2012,” Grantham said."
Summing Up
So let's look forward to learning this week that the economic recovery is continuing and that jobs are growing, albeit too slowly.
That kind of news is much preferred to the negative spring surprises of the past two years.
As financial markets continue to rise, housing continues to improve and energy exploration, development and transportation are unleashed, we can expect more good things ahead.
Then if the government knows best gang actually gets something done about our future financial stability as a nation and takes some much needed bipartisan action to rein in entitlements and encourage private sector growth, we should be facing a long period of sustained economic growth. And we deserve it.
That's my hope and that's also my current take on things.
Thanks. Bob.
Preceding the monthly unemployment report, several other important announcements concerning the economic health of our country will be issued during the week as well, beginning with business conditions as reported by the Institute on Supply Management (ISM) this morning.
The march in jobs continues, but how long? has the preview of the week's economic news:
"A pile of evidence suggests the U.S. economy hit the accelerator in early 2013 . . . . Economists polled by MarketWatch estimate the U.S. added nearly 200,000 jobs last month, reflecting the upturn in hiring that’s taken place since late last year.
The March employment report on Friday is this week’s economic special, but a pair of indexes that take measure of the manufacturing and service industries are on the main menu. Both of those indexes have also pointed to improved hiring trends in the private sector over the past few months.
Another 200,000 or so gain in hiring would lend further support to the idea that the economy is finally getting out of the quicksand and back onto solid ground after more than three years of muddy and uneven results.
Yet it will take a lot more positive data to cement the view that the start-and-stop recovery is about to enter a higher phase. The U.S. has generated a burst of job growth in each of the past two years, only to see hiring soften by midyear as key sectors of the economy faltered.
Higher taxes and gasoline prices, a still-soft global economy and divided government in Washington all pose threats to growth in the months ahead. U.S. lawmakers, for instance, are still at odds over tax, spending and debt policy. . . .
“What we don’t know is what’s going to happen as the effects of the sequester kick in and there is a hit to [worker] earnings,” said chief economist Richard Moody of Regions Financial. “And there’s still a lot of fiscal policy uncertainty — we seem drift from one crisis to another.”
Survey says!
The outlook on hiring will be partially colored in on Monday through a poll of manufacturing executives by the Institute for Supply Management. The ISM queries the executives who purchase supplies for their companies to find out how their firms are doing.
MarketWatch consensus
| date | report | Consensus | previous |
|---|---|---|---|
| April 1 | ISM | 54.2 | 54.2 |
| April 1 | Construction spending | 1.0% | -2.1% |
| April 2 | Factory orders | 2.9% | -2.0% |
| April 2 | Motor vehicle sales | 15.3 mln | 15.4 mln |
| April 3 | ISM nonmanufacturing | 55.8 | 56.0 |
| April 4 | Weekly jobless claims | 350,000 | 357,000 |
| April 5 | Nonfarm payrolls | 193,000 | 236,000 |
| April 5 | Unemployment rate | 7.7% | 7.7% |
| April 5 | Trade deficit | -$45.0 bln | -$44.4 bln |
“U.S. manufacturing appears to be improving once again, after faltering in the middle part of 2012,” noted economist Andrew Grantham at CIBC World Markets. . . .
The overall ISM services index, meanwhile, is projected to dip slightly to 55.8% in March from a relatively robust 56% in the prior month. The index is issued Wednesday.
The ISM lead-ins will give way on Friday to the March jobs report.
The MarketWatch poll of economists projects a 193,000 net gain and a 200,000-plus number if government is excluded. . . .
Hiring has accelerated sharply since last fall, averaging about 205,000 new
jobs a month since November. The unemployment rate has drifted a bit lower to
7.7%, though no change is expected in March.
The same pattern of surging job growth occurred in 2012 and 2011, only to fizzle out. Yet a growing number of economists think this time is different.
For one thing, consumers have sharply reduced household debt, and by one measure it’s at the lowest level since at least 1980. A buoyant stock market and rising home prices are also adding to household net worth.
Perhaps more important is the wild card of housing. In each of the past two years, housing was a drag on the economy early in the year. That’s not the case in 2013. The industry is on the upswing after its worst slump in modern times.
“A resurgent housing market is the main difference between this year’s upturn in labor market conditions and the false starts of 2011 and 2012,” Grantham said."
Summing Up
So let's look forward to learning this week that the economic recovery is continuing and that jobs are growing, albeit too slowly.
That kind of news is much preferred to the negative spring surprises of the past two years.
As financial markets continue to rise, housing continues to improve and energy exploration, development and transportation are unleashed, we can expect more good things ahead.
Then if the government knows best gang actually gets something done about our future financial stability as a nation and takes some much needed bipartisan action to rein in entitlements and encourage private sector growth, we should be facing a long period of sustained economic growth. And we deserve it.
That's my hope and that's also my current take on things.
Thanks. Bob.
Subscribe to:
Posts (Atom)