Unbelievable Gap Closure

Bloomberg:California last sold general-fund backed bonds in June, when it offered about $120 million of debt for veteran’s homes. The state sold $450 million of public-works bonds in May and $5.9 billion of debt in March.

The standoff drove the extra yield investors demand on 10- year California bonds to 119 basis points above AAA rated municipal securities today from as low as 109 basis points in August, Bloomberg Fair Value Index data show. A basis point is 0.01 percentage point.

Schwarzenegger and legislative leaders will hammer out the details of the agreement when they meet again in Sacramento on Sept. 27th.

Bullshit. This is all about bond rollovers.

Bloat Don't Float

In the 1950-51 fiscal year, California had 10.6 million residents and the state general fund budget was $587 million. $55.40 per capita. Adjusted for inflation; $442.51 in 2010 dollars.

FY 2010-11 37 million residents and $83 billion. $2,243.24 per capita.

The Recession is Dead, Long Live the Recession

This is what the NBER says they used to determine the recession ended in June 2009:
Macroeconomic Advisers’ monthly GDP (June)
The Stock-Watson index of monthly GDP (June)
Their index of monthly GDI (July)
An average of their two indexes of monthly GDP and GDI (June)
Real manufacturing and trade sales (June)
Index of Industrial Production (June)
Real personal income less transfers (October)
Aggregate hours of work in the total economy (October)
Payroll survey employment (December)
Household survey employment (December)

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IMO they saw an inventory replenishment and called it a recovery. Regardless, the graph Rockefeller Institute pdf] at the top tells the real story. it is all about the health of the government sector not the whole economy.

Arrrgh! Talks Among Yerselves

Almost time to resume regular posting. California is heating up and the Great Double Dip is upon us. Finally some things worth talking about.