Sudden Stop

Springfield: extend our loan and give us free trash service too

 The Springfield trash fee debate, long opposed as an tax increase disguised as a fee imposed by the City Control Board, is a fair debate. However,  Rep Cheryl A. Coakley-Rivera, with a money-for-nothing-and-trash-pickup-for-free amendment may well guarantee that Springfield gets neither. 

Given the value of an extension on the $52 million interest free loan, serious question the Rep's judgement here.  It's $91 a year with discounts for the elderly and you actually get something for your tax dollar.

That's some serious change

Massachusetts donors giving to the Obama Inaugeration, several at the $50K limits:

Laura	Debonis	Not employed	Boston	MA	02108-1203	$25,000.00
Richard	Diperna	Self employed	Swampscott	MA	01907-2717	$25,000.00
Jack	Dolmat-Connell	Dolmatconnell & Partners, Inc.	Waltham	MA	02453-8904	$1,000.00
Joanne	Egerman	IR	Weston	MA	02493-1409	$50,000.00
Paul	Egerman	IR	Weston	MA	02493-1409	$50,000.00
David	Fubini	Mckinsey&Co, inc	Brookline	MA	02445-7428	$25,000.00
John	Guerra	Self employed	Truro	MA	02666-0518	$250.00
Jane	Hale	Brandeis University	Marshfield	MA	02050-6005	$250.00
Scott	Harshbarger	Proskauer Rose	Cambridge	MA	02138-1503	$200.00
Minnie	Henry	Deloitte & Touche	Chestnut Hill	MA	02467-1004	$10,000.00
Jutta	Hicks	Not employed	Boston	MA	02108-1128	$37,500.00
Heather	Keane	Vista Print	Arlington	MA	02474-1208	$50,000.00
Catherine	King	Self employed	Boston	MA	02116-5447	$12,500.00
Jay	Lorsch	Harvard University	Cambridge	MA	02140-2708	$25,000.00
William	Martin	Self-employed	Cambridge	MA	02138-3338	$25,000.00
Scott	Matthews	Not employed	Cambridge	MA	02138-5358	$25,000.00
Barbara	Miliaras	Self employed	Winchester	MA	01890-3034	$250.00
Scott	Nathan	Baupost Group	Boston	MA	02116-3813	$25,000.00
Christine	North	Pond North LLP	Pembroke	MA	02359-1948	$25,000.00
Ahmdraya	Parlato	Not Employed	Cambridge	MA	02138-2534	$13,000.00
Philip	Ragon	Executive/EO	Cambridge	MA		$50,000.00
Susan	Ragon	Executive/VP	Cambridge	MA		$50,000.00
Gerard	Riveron	Dorfman Jewelers	Boston	MA	02199-7820	$250.00
David	Schechter	Perspective Capital	Chestnut Hill	MA	02467-2624	$20,000.00
Ronald	Shaich	Panera LLC	Brookline	MA	02446-4020	$25,000.00
Carole	Simpson	Emerson College	Boston	MA	02111-1022	$500.00
Daniel	Thibeault	Graduate Leverage	Framingham	MA	01701-3043	$25,000.00
Ellen	Wingard	Self employed	Chilmark	MA	02535-0478	$250.00
Laura	Wyckoff	Upton DCM	Brookline	MA	02446-2237	$250.00

Best and the Brightest

And the 2008 winner is Bob Litterst of Fidelity Cash Reserves earning 2.86% for 2008 in his managed fund.  Of course, it is a money market fund so all he had to do was buy lots and lots of Treasuries, which the fund did.

Past winners:

As Boston Capital's manager of the year, Litterst succeeds many distinguished local fund executives who happen to be suffering this year. The 2007 and 2005 winner, CGM Focus Fund manager Ken Heebner, is down about 50 percent. Dan Rice of the BlackRock Global Resources Fund is doing even worse with a 2008 loss of more than 56 percent so far. The others are dealing with serious problems of their own, though all the previous winners still outperformed the Standard & Poor's 500 index over the past five years.

In other words, the pros did no better than the armchair investors, except the pros charged a point or so for their expertise and snappy suits.  Save the points.  Random walk anyone?

Quantitative Easing

I have no idea if the Federal Reserve's move to buy a raft of bonds and driving down yields all along the yield curve will drive the banks to lend.  I do know it'll drive them to offer attractive mortgage rates, then cherry pick among high FICO scores.

If you have a manageable credit history and a house that not underwater, there's a 4.00% 30 fixed in your 2009 future.

Marriage, the slow way to equality

Massachusetts, not exactly a bellwether state, is the only one marrying men and women, respectively to men and women; a federal law that says it ain't so, a Democrat president who agrees, probably 2/3 of the states with laws on the books preventing it and a whiny movement whose resonating argument is that the majority is a bunch of bigots--never the likely way to win hearts.

But if right are being denied, absent segregated schools, seats in the back of the bus, straight restrooms only and oppressive voting rights, it's probably not that meaningful rights are being denied but rather that it's the principal of the thing.  And if it's the principal of the thing, it's not a way to win hearts because I ("I" the majority) don't feel strongly about feelings that are hurt, at least not strongly enough to call my rep.

Rather than persevere for an already lost cause, why not address those 'rights' for which you pine:

Filing joint income tax returns with the IRS and state taxing authorities.  What's the point of this relic? Arguably, it's because Nations need growth, population growth by definition requires kids, marriage is a good institution to raise kids so let's give a tax break to encourage all that.  But really, how many people propose after visiting their tax accountant. Is there any serious concern that marriage will decline if we eliminate joint rates? Support the flat tax and eliminate this alleged perk for the married.  It's just as likely to be a penalty anyway.

Inheriting a share of your spouse's estate.  Great idea!  Leaving your estate to a loved one tax free.  But why should that right be limited to a spouse?  Eliminate the estate and gift tax.  Absurd tax anyway; taxing someone for dying. Indeed.

Receiving Social Security, Medicare, and disability benefits for spouses.  Yet another great idea.  These benefits ought to be property rights, determined by the holder, not the government, who should receive them if the holder dies, whether the holder of the right is straight, gay, black or white.  In the absence of a spouse, It's only fair to require the holder to assign a beneficiary.

And of course the same is true for veterans' and military benefits for spouses, such as those for education, medical care, or special loans.

Advocates point to employment benefits: Obtaining insurance benefits through a spouse's employer; family leave to care for your spouse during an illness; bereavement leave if spouse or spouse's close relatives dies.  There are plenty of good reasons why employers ought not to be in the medical insurance business anymore.  As for the bereavement leave issue, it adds to the laundry list, but it's hard to imagine the any widespread employment practice that refuses leave, where the benefit is otherwise available, arbitrarily based on a marriage certificate.  

Mark Twain's cat

A cat that's stepped on a hot stove once will never step on the hot stove again ... or a cold one.

Burned by the stock market, the boom of oil and the bust of housing, and the rise of the land of the frugal, how long 'til buyers come back to those markets, particularly the boomers who've received the wake-up call of losses they'll probably not make up before retirement.  Seems to argue for doldrums for stocks and housing rather than any sharp recovery at the first sign of recession's end.

Keynesian. He missed that chapter

Massachusetts has a much smaller deficit than New York but a significant deficit nonetheless. We can only hope that Massachusetts doesn't look to New York for bright ideas.

Gov. Paterson yesterday socked New Yorkers with a mind-boggling 137 proposed new and hiked taxes on everything from beer to cab rides to iTunes downloads and movie tickets.

The doomsday, $121.1 billion plan represents the biggest tax hike in state history and slashes services across the board - while still increasing spending by $1.4 billion.

Recall the Governor?

Say what you will about Governor Romney, but the guy could heft a 9C axe.  Rule of cuts: 1) do it quick and 2) spread the pain.

Now facing revenue declines and by the way, revenues collected by DOR through November, 2008 are only off slightly from November 2007 year to date.  The worst is allegedly ahead yet you'd think that the seven horsemen are at Governor Patrick's door.  

He has accomplished precisely none of his campaign promises, and now the State, facing projected significant revenue loss, must rely on his skills which appear to be limiited to wild irrelevant support of gay marriage and scoring sweet book deals. 

Thus far, the Governor has, with his 9C power, cut some of his increases but has yet to decide on any meaningful cost reform.  That's ok some will say.  He's a Democrat and cost cutting isn't his job.  However, he's yet to inspire the Legislature to adopt any of his revenue ideas and may have, ironically reduced revenue with his push for Combined Reporting inasmuch as the Massachusetts companies profitable on a standalone basis now suffer consolidated losses because things are tougher elsewhere than they are here.

Recall?  Bring back Romney.  He balances the budget, cuts the fluff plus he's a perfect foil for the moonbats to villify.  In 2003 he faced a $3 billion dollar deficit and balanced the budget.  Today's $2.0 billion shortfall is chumpchange by comparison.  Bring it on. 

As an economic stimulus, it's overrated

Not to spoil the party, but this is not a new idea. Keynesian "pump-priming" in a recession has often been tried, and as an economic stimulus it is overrated. Wall Street Journal.

Given that "crumbling roads and bridges" is the politician's cliche of the moment, I'm pretty sure that Milton Freidman concluded decades ago that Keynesian stimulus was either too little to make a difference or else it drew away resources from private and more productive investment.

The public road leading to my home seriously could use a few inches of asphault that the town can allegedly not afford.  So, were we homeowners to go hat-in-hand to the State or Fed and score some cash, no question the various construction workers and aggregate salesmen would be happy for the work. 

But at the end of the job, we on that small deadend road will be no more productive because the road's nice.  Better for the collective that the money for paving that little country road not be spent but rather returned to the treasury in the form of less taxes, fees or levies on the taxpayer.

But, I'd really like that road paved.  That bridge built.  That Town Hall enlarged.  That... .

The call's become too loud. "A crisis is a terrible thing to waste," says Governor Patrick, pushing headlong into the trough. London Banker threw in the towel:

It’s this simple: I won’t invest in a country that bails out failure and punishes savers. I won’t invest in the US or UK until they change course and protect savers and investors, ensuring a reasonably predictable positive return. In the EU, I will be very selective, preferring those conservative states like Germany that never embraced the worst excesses, although sadly still have fall out from individual banks' stupidity in buying into foreign excess. I will know when it is safe to reinvest when policy interest rates, bank/intermediary oversight and accounting standards give me confidence I am better protected than the corporate or financial elite.

It appears to be but a matter of time that the Trillion Dollar Obama Bomb will be met with sweets and praise as the great liberator, as politicians rally to explain that spending is actually investment, and the same politicians don't rally to discuss the downside of historic spending.  

Well, if the market doesn't recognize that deflation is here, then why is the 30 year treasury yielding under 3%. (aside: those with good credit, watch your yields.  There's a mortgage refinancing in your future and it's 4% fixed). 

The Massachusetts Fiscal Crisis and Perspective

Just some perspective.  The collective hair of massachusetts lawmakers is afire, and the collected revenue Y-T-D November is off 1.2% that of Y-T-D fiscal '08, just north of the equivalent of a rounding error.