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-- Posted Monday, 20 April 2009 | Digg This Article | Source: GoldSeek.com
Rick’s Picks Monday, April 20, 2009 “Phenomenally accurate forecasts” Here’s the headline from Saturday morning’s Boulder Camera that pushed Colorado’s big snowstorm off the front page: City Mulls Millions in Cuts. Uh-oh. Could it have been just a few short weeks ago that we were reading about how Boulder’s budget was well under control? The story then was that the city was going to have to watch expenditures more closely than usual because of the severity of the economic downturn. Now, though, they’re talking about shutting down the recreation centers, fire stations, libraries and who knows what else. There’s also the dreaded possibility of “special tax districts” that would raise money to support services and amenities that most taxpayers must have thought they were already paying for in-full. Could this happen where you live? We hope not, but if Boulder can be blindsided by this kind of news, it could happen anywhere. The town has never struck us as an out-of-control spender, as have other cities in which he have lived, including San Francisco and New York, and budgeting at the state level has always seemed relatively conservative.
Since a significant portion of Boulder’s revenues comes from business taxes, shoppers and diners probably bear some of the blame for cutting back on frills. So what’s the city to do? They could try the Obama approach, exhorting consumers to keep spending money they don’t have, presumably by borrowing it. Or, as appears more likely, they could cut back on outlays until the budget is back in balance. Too bad Boulder doesn’t have the Bernanke option of financing prodigious increases in spending by purchasing its own municipal bonds. Ten million dollars raised this way would probably do a lot more good for the local economy than ten spurious billions would do for the U.S. economy. At least we could see where it’s going. For the moment, it appears that Joe Taxpayer will have to content himself with news that Citi, Goldman Sachs, Well Fargo and friends are finally starting to make money. How nice for them. Thrift, Heaven Forbid! With the mortgage crisis still far from resolved, we read that Rep. Barney Frank is attempting to dust off an old proposal that would put taxpayer backing behind municipal bonds. He thinks cities are paying too much to borrow and that federal guarantees would help reduce such costs. We can only hope for Boulder’s sake that the legislation gets fast-tracked in time to solve the city’s budget crisis without the unpleasantness of layoffs, library closings and, heaven forbid, thrift. Perhaps if Moody’s and Standard & Poor’s play ball with Mr. Frank, passing out triple-A ratings with the same easy generosity they brought to subprimes, buyers of munis will be none the wiser about Boulder’s budget problems. Failing that, maybe the banks could be made to purchase the muni bonds with some of that bailout money? Now that would be a real vote-getter for Mr. Frank and his colleagues. *** Rick's Picks publishes a daily trading newsletter for gold, stock, commodity, and mini-index traders 240 times per year. Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers' initials will be used unless express written permission has been granted to the contrary. All Contents © 2009, Rick Ackerman. All Rights Reserved. www.rickackerman.com
-- Posted Monday, 20 April 2009 | Digg This Article | Source: GoldSeek.com
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