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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (108601)	2/20/2010 7:56:05 PM
From: niceguy767	1 Recommendation Read Replies (1) \| Respond to of 116555

The North American economy has been fueled by "housing equity" over the past 50 years...Interest rates have dropped to 50 year lows in effort to prop up "housing equity" but, alas, the housing bubble has burst and along with that the notion of "ever-increasing" paper wealth on the North American consumer. Those living on the "housing equity" credit card bubble are now being blown out of the consumer pond. It is indeed a sour note for the economy when today's low mortgage rates can no longer prop up housing prices. The loss of the North American "housing equity" consumer is having ripple effects that are now becoming tsunamis in international commerce. Greece, the PIIGs, then who will be gasping for air?

To: mishedlo who wrote (108601)	2/21/2010 12:13:54 AM
From: Jim McMannis	1 Recommendation Read Replies (1) \| Respond to of 116555

GM on the municipal level....? Unions ahead of bondholders? Muni Threat: Cities Weigh Chapter 9 Just days after becoming controller of financially strapped Harrisburg, Pa., in January, Daniel Miller began uttering an obscure term that baffled most people who had never heard it and chilled those who had: Chapter 9. The seldom-used part of U.S. bankruptcy law gives municipalities protection from creditors while developing a plan to pay off debts. Created in the wake of the Great Depression, Chapter 9 is widely considered a last resort and filings under it are more taboo than other parts of bankruptcy code because of the resulting uncertainty for everyone from municipal employees to bondholders. finance.yahoo.com The economic slump, however, is forcing debt-laden cities, towns and smaller taxing districts throughout the U.S. to consider using Chapter 9. As their revenue declines faster than expenses, some public entities are scrambling to keep making payments on municipal bonds. And that is causing experts to worry about the safety of securities traditionally considered low risk. "People believe that municipal debt is safe based on assumptions that are no longer true," says Kenneth Buckfire, managing director and chief executive of Miller Buckfire & Co., an investment bank that has worked with corporations on restructurings and now is advising municipalities. For example, it isn't safe to assume that governments can raise taxes to cover shortfalls, he says. more