Loading ...Brace Yourself!!!
I’ve gotten a preview of the next budget for Indianapolis, I’ll have more details as they become available, but from what I can gather, things are not as bad we thought they were, they are much worse! So brace yourself for the disaster of almost Biblical proportions that is coming.
July 17th, 2008 at 10:57 pm
And who told you this? Olgen Freaking Williams?
Please.
July 17th, 2008 at 11:09 pm
Dahhh Bart and comapany (Servas was just as bad!)
kept writing blank checks! What do you expect folks! The city been running around like my wife with a credit card! Reckoning time is near! OK OK OK Lets not start sounding like a doomsdayer! On the financial side of things buy VISA the Olympics are coming! Can you say 8 8 8. Ok win a free Abduhl ego shirt tell me what that means!
July 17th, 2008 at 11:09 pm
Hey Think Again,
Just wait till Friday when the budget ordinances are released. Bend over and grease up, dude.
July 17th, 2008 at 11:11 pm
Dang it I spelled Abdul’s name wrong! Mrs. Barr my old (6 foot under but one hell of a teacher) English teacher would have chastised me for the error!
July 17th, 2008 at 11:15 pm
Sorry Abdul I only like girls! VBG
July 18th, 2008 at 12:54 am
As for the city you can’t keep issuing bonds and think the tax payers can pay for it! Follow the money trail who makes all the money when ya issue those bonds! Just like the mortgage mess. The worst isn’t over on that front. The variable rate mortgage problem is worse then the sub prime mess. What’s that mean no housing growth for Indy! Check out this chart boys and girls! http://calculatedrisk.blogspot.com/2007/10/imf-mortgage-reset-chart.html More bad times are a coming for the Indy housing market!
July 18th, 2008 at 2:45 am
This is a old column of Hank Greenberg from Market Watch explaining the mortgage reset mess. If any of you out there have one of these loans you might take a second look at it.
http://blogs.marketwatch.com/greenberg/page/2/
July 18th, 2008 at 5:26 am
Think Again obviously has a problem!
July 18th, 2008 at 7:22 am
Whatever it is, having it up front now is better than hiding it further. Much better than the fiscal fiddling while D.C. burns.
July 18th, 2008 at 8:02 am
No problem here guy, except: unqualified deputy mayors who mumble through their day.
I’ve seen the proposed budget. It’s poorly prepared, and full of holes.
I only scanned it quickly. Will get to more details when I can keep a copy of it for study.
No greasing up here Abdul. What a crude reference, too. Expected better of you.
July 18th, 2008 at 8:46 am
If the budget is filled with just hiring more “hall monitors”, then Mayor Ballard better put his helmet on, because the brickbats will be flying.
There are police assets in place right now. that I don’t believe to be utilized to their fullest potential. Just hiring more bodies didn’t help last time, and it won’t help this time either. And paying them more without getting more in return in just a waste of resources.
I can’t wait to see the details of the budget. Maybe, it will show me that I have misread the direction that the City/County plans to take.
July 18th, 2008 at 9:55 am
Moneyguy
July 17th, 2008 at 11:09 pm
“Dahhh Bart and comapany (Servas was just as bad!)kept writing blank checks!”
Beurt SerVass should be doing twenty years, hard time for the things he got away with…But, Bart’s God Father got the chambers named after him, for being “Chief Thief”.
I’m sure he sold the Water Company out from under us, because he believes he can get the ice water consession, in Hell.
July 18th, 2008 at 10:20 am
what’s $11.5 million among friends?
July 18th, 2008 at 12:10 pm
I’d like to point out that BOTH the Republican and Democrat parties are responsible for the mess. Why do we keep voting for them, again?
July 18th, 2008 at 12:17 pm
I’ve stated b4 on this blog that municipal spending via bonding is basically a doomsday device for municipal finances - especially in light of the finance industry’s capital crunch (it’s not a credit crunch, lowered credit is a side-effect of dwindling capital).
.
When properties lose value and when properties are foreclosed, property taxes can’t keep up with bond payments. Add a lowered municipal credit rating to that and bond costs begin rising. That means that municipalities who rely upon bonds as a funding vehicle need to borrow more at higher cost, at an increased risk to the lender.
.
Considering that the mortgage disaster has yet to reach it’s peak, and considering that the derivative markets are beginning to unravel, and considering that inflation is continuing to drive the dollar down, my prediction is that this years budget is gonna look relatively healthy 12 months from now. Everyone danced through the mid 80’s until about 2005. Flawed monetary policy and risky finance strategies have now returned to roost, and it’s time to pay the piper.
.
So much for all of those national mayor seminars and conferences that are run by the wonderful experts via Harvard. They’ve shown all of our cities how to run themselves into the ground. I certainly hope that Mayor Ballard has the good sense to ignore their advice.
July 18th, 2008 at 12:31 pm
As follow up to my last comment…
.
From today - “US faces global funding crisis, warns Merrill Lynch” (Like I said above, it’s a capital crunch, not a credit crunch. This article covers only the international side of the problem):
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/16/ccusdebt116.xml&CMP=ILC-mostviewedbox
.
And from yesterday, the following article covers more detail of what we’re facing. “End of Illusions”:
http://www.economist.com/finance/displaystory.cfm?story_id=11751139
July 18th, 2008 at 1:14 pm
What do we have to do as a city and state to get a rock bottom credit rating? Can’t we just stop paying the bonds? Would they come in to repossess our Taj Mahal schools?
.
I’m ok with the city having rotten credit! If the city can’t get more credit, then it will surely stop the spending!
July 18th, 2008 at 2:46 pm
And, we want to keep our consumption pipeline filled with benefits-needy single mother births and low-income illegal workers. I’m 100% with eliminating unfair tax loopholes, TIFFs, abatements, and punishing illegal hiring. But, that doesn’t fix our dogmatic, pigheaded, Fantasy Island notions that we can’t say “No” to anybody regarding benefits. IT’S NOT 1960 ANYMORE. Not only can Japan forge steel, China can too and they’re kicking our tail. I suggest we skip the wrangling and reduce spending across-the-board now, or we get to spend zero later when we’re cut-off. Those are the choices that are left.
July 18th, 2008 at 2:48 pm
And, even if excursions like Iraq play-out strategically, they are literally no longer affordable. .
July 18th, 2008 at 2:52 pm
Melyssa may have stumbled into a quasi-answer there.
Except: every level of government exists, to some degree, on payments from another level of government. The city budget’s portion that is funded by federal grants was around 10% a few years ago–it may have altered somewhat.
If those payments to local govt. are delayed, for, say, a $5 million speed limit enforcement grant…then: the officers paid by the grant don’t stop working. The cars don’t stop needing gas, and the benefits need to be paid.
They still need office supplies and clerical help and office space to process those extra speeding tickets.
So, the city is forced to do short-term borrowing, otherwise known as tax anticipation warrants. Until the federal funds come in. The cost of borrowing is much heavier if the credit rating is poor. That added burden of extra cost, results in fewer dollars into the programs that we really need.
And Shore, whever you got your definition of capital/credit, you need a refersher course: the current credit crunch is the direct result of multiple causes. Strictly speaking, the availability of capital is not one of them.
Ridiculous decisions by lending officers–now THAT’S one of them. Available capital wasn’t a problem then, and, frankly, isn’t a huge problem now. It’s just that now, the credit available is being more tightly-monitored, as it should’ve been for the last decade.
More than any one single factor, the dollar’s crumbling is responsible for this crash. And it’s worth less because we’re shipping so much of it overseas, primarily for a commodity–oil–that we’ve failed to reign in for three decades. Those who do control it are a small group, a cartel, subject to political and regime whims.
And they’ve whip-lashed us for sport for the past six years.
And now they’re using those deflated dollars to buy up some of our prized assets.
A vicious circle, but, make no mistake: if you’ve got a good project for which you need loans, and the project makes sense, there is acpital available, at a rate unmatched in our lifetimes.
Good luck getting the deal underwritten in any reasonable timeframe, though, because the folks who used to do that…well, their numbers are dwindled and their desks are overloaded.
July 18th, 2008 at 3:24 pm
Amen to less oil consumption. Hybrid car & heat & air, biking when possible because I don’t like forking any more $ than necessary to those pirates, foreign or domestic.
July 18th, 2008 at 3:49 pm
TA - First off, my “definitions” come from ignoring the false explanations and/or analysis provided by the liars on FOX, CNN, PBS, etc. If you base any of your opinions on their distortions, you’re bound to rely on some concoction that they present rather than on common sense and sound fiscal policy.
.
Ask yourself this: If you’re a bank, which consideration comes first in order for you to issue a loan - your capital, or the consumers credit? Trust me. When banks have loan capital, there is no credit crunch. A consumer might pay more b/c of bad credit, but the banks aren’t gonna sit back and do nothing in the meantime. The bottom line is that they don’t have the capital to back the loans - therefore, credit is not issued.
.
You should do some research on Capital Crunch. Even the largest players have stated in plain english that this is the problem. A failing GDP and a failing dollar don’t make for good loan capital. That’s why they started investing in Chinese banks several years ago - they were planning ahead.
July 18th, 2008 at 6:33 pm
“Humor is the best medicine for bad behavior!” - Moneyguy 2008 Or did I read this quote and steal it not sure.
Ok that said I have been told that the banks are starting to give out car equity loans! Apparently with the house equity loans starting to dry up you can now get equity out of your car! (insanity!) A banker told me on vacation that credit unions are doing this because they don’t have to make money. The fees are fairly high and apparently it is fairly easy for the consumer to get upside down on the loan. The credit union ends up with a car. TOTAL INSANITY!!!!!
July 18th, 2008 at 7:03 pm
Channel 8 News at 6 reported that the State has a $urplus of over $1 Billion.
-
To ME, this means that the State owes NO MONEY to ANYONE.
-
Is this really true? We have NO DEBT ??
-
I ask, as the commandment of our Indiana Constitution at Article 10 Section 2 is quite clear:
-
http://www.in.gov/legislative/ic/code/const/art10.html
Section 2. All the revenues derived from the sale of any of the public works belonging to the State, and from the net annual income thereof, and any surplus that may, at any time, remain in the Treasury, derived from taxation for general State purposes, after the payment of the ordinary expenses of the government, and of the interest on bonds of the State, other than Bank bonds; shall be annually applied, under the direction of the General Assembly, to the payment of the principal of the Public Debt.
-
Hmmm…”any $urplus…to the payment of the principal of the Public Debt.”
-
Yep…good to know that the State of Indiana owes absolutely NO MONEY to anyone!
-
Otherwise, our government would be violating our Constitution.
-
Government wouldn’t do that, would they?!?!?!
July 18th, 2008 at 7:22 pm
The Guv must be expecting the property tax debacle to hit the fan shortly. He’s been transferring millions into the ’school rainy day fund.’ So are we now paying property tax via transfer of ’surplus’ money - which is actually tax dollars we overpaid in years past?
Sure looks like it.
July 18th, 2008 at 9:59 pm
No No No we did not overpay! The gov has been collecting a tremendous amount of interest on the toll road money! Daniels is no dummy!