How bad can the global economy get?

[Friday]

California will be dragged to its knees.  And with an economy equivalent in size to that of France, the financial drag on the rest of the U.S. will be cataclysmic.

A small taste of what's to come:

California turns to Feds for loan
Posted: 05:39 AM ET

(CNN) — California may need a quick $7 billion loan from the federal government to pay for "teachers' salaries, nursing homes, law enforcement and every other State-funded service" this month, Gov. Arnold Schwarzenegger warned in a letter sent Thursday to the U.S. Treasury secretary.

The letter, posted on the Los Angeles Times Web site Friday, echoes a statement issued a day earlier by California State Treasurer Bill Lockyer, saying the state has been locked out of credit markets for the past 10 days because of the national financial crisis.

"Absent a clear resolution to this financial crisis that restores confidence and liquidity to the credit markets, California and other states may be unable to obtain the necessary level of financing to maintain government operations and may be forced to turn to the Federal Treasury for short-term financing," Schwarzenegger wrote.
http://cnnwire.blogs.cnn.com/

[John Edward Mercier]

What?
One of the most Socialist States in the union might financially collapse?

[Pat McCotter]

And I need a loan to pay my rent, buy my food and heat my house. Let's all borrow money to run our lives day to day! What happened to the money they budgeted for those known expenditures?!?! It's like the corner diner borrowing money everyday to buy the food it need to serve its customers. Ridiculous!

[John Edward Mercier]

Cash Flow Accounting.
Isn't that for Girly Men?

[Friday]

What works for the gubmint works for the little guy, too! 

http://www.buymyshitpile.com/

[David]

What?
One of the most Socialist States in the union might financially collapse?

I see ohio doing that in the not too distant future.  Michigan too. 

[Caleb]

What?
One of the most Socialist States in the union might financially collapse?

Again.    What's funny about all this is that the state just passed its budget -- two months late, and now that they are behind on their payments, there is a shortage of loans available to cover their asses. People are starting to get pissed at them, and the governator and his cronies basically need the loan to cover for their political asses.

[John Edward Mercier]

I'm sure that a very rich California pension plan will find it in their interest to loan California the operating cash necessary to avoid pink slipping certain government workers.

[memenode]

A quick thought.

How bad can it get?

USA as we know it ceases to exist. - DONE
USD collapses. - SOON
USA as a (fictive) federation ceases to exist. - SOON.

Enjoy the fall of the USA.

Or prepare for it.

We in Europe will have a "good" show to watch. (Un?)fortunately not for long. The reaper is coming for EU too.

[Friday]

I am holding my breath for when the USD ceases to be the international currency for pricing major commodities.  Could be any day now.

Does anyone recommend a particular English-language news site or blog for monitoring this sort of thing?  Obviously CNN is a joke, and the BBC is not much better.  The Economist is somewhat better. 

[Pat McCotter]

International Herald Tribune has had some interesting articles.
http://www.iht.com/pages/business/index.php

[John Edward Mercier]

I am holding my breath for when the USD ceases to be the international currency for pricing major commodities.  Could be any day now.

Does anyone recommend a particular English-language news site or blog for monitoring this sort of thing?  Obviously CNN is a joke, and the BBC is not much better.  The Economist is somewhat better. 

Huh?
It depends on the country and even how you have your trading screen set up...
I can review the prices in any major currency just by resetting the options.
If I set it in one of the other currencies, it will register the price in those currencies but not show the difference in relative valuation between the other currency and the USD.
For example the price of gold in USD may appear to go up a couple percentage points, but in another currency do nothing. The three moved relative to each other, but exactly how takes looking at different charts.

[Friday]

Perhaps I worded that poorly.  What I was trying to say is, I am a) waiting for the USD to cease to be the primary reserve currency and b) waiting to see when oil will no longer be priced in USD/bbl. 

[John Edward Mercier]

Hard to say...

If the UK joined the EU, the Euro might dominate nearly overnight. And its much more likely that different countries will join the EU rather than become Republics of the United States.

[Friday]

U.S. banks are no longer required to have any (ANY!) cash on hand to cover their obligations.  This isn't forwarded spam; I looked this up myself (so it's homemade spam  ).

Here's a link to the text of the bailout bill that was signed on Friday:
http://money.cnn.com/2008/10/01/news/pdf/index.htm

Here's an excerpt from the bailout bill:
SEC. 128. ACCELERATION OF EFFECTIVE DATE. 13
Section 203 of the Financial Services Regulatory Relief Act of 2006
(12 U.S.C. 461 note) is amended by striking ``October 1, 2011'' and
inserting ``October 1, 2008''.

Here's a link to the text of the "Financial Services Regulatory Relief Act of 2006":
http://www.govtrack.us/congress/bill.xpd?bill=s109-2856

Here's an excerpt from that one:

SEC. 202. INCREASED FLEXIBILITY FOR THE FEDERAL RESERVE BOARD TO
ESTABLISH RESERVE REQUIREMENTS.
Section 19(b)(2)(A) of the Federal Reserve Act (12 U.S.C.
461(b)(2)(A)) is amended--
(1) in clause (i), by striking `the ratio of 3 per centum' and
inserting `a ratio of not greater than 3 percent (and which may be
zero)'; and
(2) in clause (ii), by striking `and not less than 8 per centum,' and
inserting `(and which may be zero),'.

SEC. 203. EFFECTIVE DATE.
The amendments made by this title shall take effect October 1, 2011.