User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Wednesday March 10, 2010 - 18:27:21 GMT
Foreign Exchange Analytics - www.fxa.com

Share This Story:
| | Email

California Dreaming more like Fiscal Nightmare

California Dreaming more like Fiscal Nightmare

 

As an alumnus of the great baby boomer migration from the East Coast to the West Coast in the 1970’s (Long Island to Berkeley) on the belief that weather, D, S and RnR would be a far better experience in the Bay Area than in the Great South Bay, 35 years on from the onset of great migration the California Dream of the 60’s and 70’s is looking more like the California Nightmare.  BTW I made it out early – 1985.

 

The BLS today listed California’s unemployment rate in January at 12.5%, up from 12.3% in December and only just less than Rhode Island, South Carolina and Nevada rates (Puerto Rico, a territory as opposed to a state, leads at over 15%). 

 

Droughts are the norm (population needs far outstrips the water supply, even in a rainy, snowy winter).  Farmers are facing serious water shortages and leaving fields fallow.  A drive through the Valley reveals all sorts of signs posting “New Dust Bowl from US Congress” which farmers claim is more interested in preserving some species of fish the size of one’s finger than the state’s agricultural interests. While the Valley is not home to a huge population, it has been home to its share of the boom in population and housing booms.

 

Apart from the tech sector, the engine of growth in the state is the prison system…the new factories in the fields (of Sacramento Valley), 33 in all. 

 

The budget deficit in the state is forecast at $20bln for 2010 (though government is forecasting $14bln), about what it was in 2009.  And this despite massive cuts in state programs including Medical, education and infrastructure. 

 

The state legislature is more dysfunctional than the US Senate, requiring super majorities to raise taxes and assuring permanent gridlock on most budget issues.  Governor Schwarzenegger’s approach to the budget gap funding problem when he was first elected to office was borrow long to pay for short-term debt expirations and currency expenditures.  This was unsustainable short of an elevated growth rate in the state and the Great Recession has been no greater than in California

 

So I read with special interest today’s WSJ article on the state’s budget crisis and in particular the tuition increases at the University of California system – 32% tuition increase has prompted a state-wide rash of student protests reminiscent of government workers lashing out against austerity measures in Athens.  Sather Gate on UC Berkeley campus, which I walked under daily as a student there, is the photo journalist’s preferred shot of student protesters.  And tuition and fees are now $10,300 a year up three fold from 1999 and up from $636 a year when I was enrolled.  The students are complaining that the cost of state public education is now on par with private post-secondary education.  In other words the social subsidy, aimed at allowing less advantaged students to afford a quality university education, is largely gone.  The reality is quite different than the claim to social equalizer for UC system…enrollment in the best universities in the UC system has always been largely dominated by students who could afford to pay private level tuition and fees paid for the average tax payer who could not afford and mostly can’t qualify to get into the most competitive campuses in the system.  What has gone away for the UC system (clearly there is a real need for a number of educationally gifted and income constrained students), is a subsidy for higher income families paid for by those who mostly never consume directly the benefits (sending their kids there) of the UC system. 


If the higher education subsidy story is not enough to cause the hair on your neck to stand up, then look at what the great state of California is doing for its state’s first responders retirement benefits according to the WSJ today.


“The California legislature? Good luck with that. In 1999, the Democratic legislature ran a reckless gamble that makes Wall Street's bankers look cautious. At the top of a bull market, they assumed their investment returns would grow at a 8.25% rate in perpetuity—equivalent to assuming that the Dow would reach 25,000 by 2009—and enacted a huge pension boon for public-safety and industrial unions.


The bill refigured the compensation formula for pension benefits of all public-safety employees who retired on or after January 1, 2000. It let firefighters retire at age 50 and receive 3% of their final year's compensation times the number of years they worked. If a firefighter started working at the age of 20, he could retire at 50 and earn 90% of his final salary, in perpetuity. One San Ramon Valley fire chief's yearly pension amounted to $284,000—more than his $221,000 annual salary.


In 2002, the state legislature further extended benefits to many non-safety classifications, such as milk and billboard inspectors. More than 15,000 public employees have retired with annual pensions greater than $100,000. Who needs college when you can get a state job and make out like that?


In the last decade, government worker pension costs (not including health care) have risen to $3 billion from $150 million, a 2,000% jump, while state revenues have increased by 24%. Because the stock market didn't grow the way the legislature predicted in 1999, the only way to cover the skyrocketing costs of these defined-benefit pension plans has been to cut other programs (and increase taxes).


_This year alone $3 billion was diverted from other programs to fund pensions, including more than $800 million from the UC system. It is becoming clear that in the most strapped liberal states there's a pecking order: Unions get the lifeboats, and everyone else gets thrown over the side. Sorry, kids. “


The state also has a very active proposition legislative channel that more often than not allows special interest groups to amass enough signatures and run ad campaigns to get fiscally imprudent laws passed…recall Proposition 13 of the late 1970’s that stripped government of raising real estate taxes unless a property is sold (property tax rate adjusts to the new owner and home price)…this one crippled the educational system at the time until the government responded with borrowing more in the debt market to fund itself.


Is there CDS market for California state bonds and muni’s?  If there is a CDS on state paper I would be a buyer.  California’s fiscal position is every bit as bad as Greece’s and increasingly facing a similar set of choices and constraints …massive spending cuts and tax hikes (assuming they can be passed), higher borrowing costs and sub-par growth.  The crisis is here.  I just wonder when markets and US government debt will reflect this implicit guarantee.


David Gilmore

 

Forex Trading News

Forex Research

Daily Forex Market News
Forex news reports can be found on the forex research headlines page below. Here you will find real-time forex market news reports provided by respected contributors of currency trading information. Daily forex market news, weekly forex research and monthly forex news features can be found here.

Forex News
Real-time forex market news reports and features providing other currency trading information can be accessed by clicking on any of the headlines below. At the top of the forex blog page you will find the latest forex trading information. Scroll down the page if you are looking for less recent currency trading information. Scroll to the bottom of fx blog headlines and click on the link for past reports on forex. Currency world news reports from previous years can be found on the left sidebar under "FX Archives."



Elevate Your Trading With The Amazing Trader!

The Amazing Trader includes:
  • Actionable trading levels delivered to YOUR charts in real-time.
  • Live trading strategy sessions.
  • Market Updates with Trading Tools.

Register To Test Your Amazing Trader


Trading Ideas for 11 December 2017

Register for the Amazing Trader

1.

Amazing Trader EVENT RISK Calendar:

Tue 12 Dec
09:30 GB- CPI
10:00 GB- ZEW Survey
13:30 US- PPI
Wed 13 Dec
00:30 AU- Employment
09:30 GB- Unemployment
13:30 US- CPI
15:30 US- EIA Crude
19:00 US- Fed Decision
Thu 14 Dec
07:30 CH- SNB Decision
All Day- Global- flash PMIs
12:00 GB- Bank of England Decision
12:45 EZ- ECB Decision
13:30 US- Retail Sales
13:30 US- Weekly Jobless
14:45 US- Industrial Production

Forex Trading Outlook


Potential Trading Opportunities

  • POTENTIAL PRICE RISK: Mediun Tue--10:00 GMT-- DE- ZEW. Second Tier Sentiment Survey
  • POTENTIAL PRICE RISK: HIGH-Medium Tue--13:30 GMT-- US- PPI

  • POTENTIAL PRICE RISK: HIGH-Medium Wed--09:30 GMT-- GB- Employment
  • POTENTIAL PRICE RISK: HIGH Wed--13:30 GMT-- US- CPI
  • POTENTIAL PRICE RISK: Medium Wed--15:30 GMT-- US- EIA Crude
  • POTENTIAL PRICE RISK: High Wed--19:00 GMT-- US- Fed Decision


  • POTENTIAL PRICE RISK: HIGH- Thu --00:30 GMT-- AU- Employment
  • POTENTIAL PRICE RISK: Medium- Thu --All day-- global- flash PMIs
  • POTENTIAL PRICE RISK: HIGH-Medium- Thu --07:30-- CH- Swiss National Bank Decision
  • POTENTIAL PRICE RISK: HIGH-Medium- Thu --09:30-- GB- Retail Sales
John M. Bland, MBA
co-founding Partner, Global-View.com EXCLUSIVE: Global-View Daily Trading Chart Points Updated

EXCLUSIVE: Global-View Free Forex Database updated




TRADER ADVOCACY ARTICLES

Trader's Advocate Articles..

pic

Retail Forex Brokerage Changing!

Are you looking for your first broker or do you need of a new one? There are more critical things to consider than you might have thought.

We were trading long before there were online brokers. Global-View has been directly involved with the industry since its infancy. We've seen everything and are up-to-data with recent regulatory changes.

Our Best Brokers listing section includes:Forex Broker Reviews, Forex Broker Directory, Forex Broker Comparisons and advice on How to Choose a Forex Broker

If would like guidance, advice, or have any concerns at all ASK US. We are here to help you.

SEE Our Best Brokers List

Currency Trading Tools

  • Live rates, currency news, fx charts. 

  • Research reports and currency forecasts.

  • Foreign Exchange database and history.

  • Weekly economic calendar.

Directory of  Forex trading tools

 
Terms of Use    Disclaimer    Privacy Policy    Contact    Site Map


Forex Forum
Forex Trading Forum
Forex Forum + forex rates
Forex Forum Archives
Forex Forum RSS
Free Registration

Trading Forums
Currency Forum Guide
Forum Directory
Open Forum
Futures Forum
Political Forum
Forex Brokers
Compare Forex Brokers
Forex Broker News
Forex Broker Hotline

Online Forex Trading
Forex Trading Tools
Currency Trading Tools
Forex Database
FX Chart Points
Risk/Carry Trade Chart Points
Economic Calendar
Quicklinks to Economic Data
Currency Futures Swaps
Fibonacci Calculator
Currency Futures Calculator

Forex Education
Forex Learning Center
FX Trading Basics Course
Forex Trading Course
Forex Trading Handbook

Forex Analysis
Forex Forecasts
Interest Rate Forecasts
Central Bank Forecasts

FX Charts and Quotes
Live FX Rates
Live Global Market Quotes
Live Forex Charts
US Dollar Index Chart
Global Chart Gallery
Daily Market Tracker
Forex News
Forex Blog
Forex News
Forex Blog Archives
Forex News RSS
Forex Services
Forex Products
GVI Forex
Free Trials
FX Bookstore
FX Jobs and Careers
Jobs USA
Jobs UK
Jobs Canada

Forex Forum

The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.

Forex News

The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.

Currency Trading

Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by Global-View.com.

Forex Brokers

The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.

Forex Trading

Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.

FX Trading

Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.

Forex Blog

Global-View.com also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at Global-View.com. This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.

 

WARNING: FOREIGN EXCHANGE TRADING AND INVESTMENT IN DERIVATIVES CAN BE VERY SPECULATIVE AND MAY RESULT IN LOSSES AS WELL AS PROFITS. FOREIGN EXCHANGE AND DERIVATIVES TRADING IS NOT SUITABLE FOR MANY MEMBERS OF THE PUBLIC AND ONLY RISK CAPITAL SHOULD BE APPLIED. THE WEBSITE DOES NOT TAKE INTO ACCOUNT SPECIAL INVESTMENT GOALS, THE FINANCIAL SITUATION OR SPECIFIC REQUIREMENTS OF INDIVIDUAL USERS. YOU SHOULD CAREFULLY CONSIDER YOUR FINANCIAL SITUATION AND CONSULT YOUR FINANCIAL ADVISORS AS TO THE SUITABILITY TO YOUR SITUATION PRIOR TO MAKING ANY INVESTMENT OR ENTERING INTO ANY TRANSACTIONS.

Copyright ©1996-2014 Global-View. All Rights Reserved.
Hosting and Development by Blue 105