The Muddle Years – Why the California economy is destined for years of slow growth and declining home values. 10 charts showing California still deep in recession and no state budget as we enter September.

ComradeUSA

Exactly. This is anything but a reasonable estimate. The stock market is now back to 1998 levels on a nominal basis. Adjusted for inflation it is doing much worse. Why is this 8% baked in the cake? It isn't. Plus the article assumes a steady career progression. Look closely at unemployment dynamics and things are now very different (including wage growth).

And recent trends suggest that this is flawed. Without that, the entire get rich slowly compound interest world falls apart. Look at U.S. Treasuries and what they are kicking back. The stock market? With half the trading done by high frequency traders and hedge funds, the new retail investor is going to get skewered.

ComradeUSA

You are right that this is peanuts. But if something like this is going on, you can imagine what other things are going on for a $19 billion budget gap. Trouble is, the bigger money is usually entrenched with cronies.

A local school district had a few million dollar short fall and many administrators with six-figure salaries and what do they do? Cut janitors and fire young teachers. Low hanging fruit.

ComradeUSA

This housing market is running on government fumes. First, look at the volume of FHA loans (nearly 40% of all loans). These only require 3.5% as a down payment. Throw in the tax credit, and in many cases on a net-net basis people were buying homes with nothing down. Now that the tax credit is phasing out, people actually have to come to the table with some money (any money) but in the crappy real economy people are running on bare bones budgets).

ComradeUSA

What a stunner. You mean you give a massive incentive to people during a horrible economy with no checks and balances and people lie on their tax return? Say it ain't so!

ComradeUSA

TROPHY CASE

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