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Old 10-04-2008, 07:58 AM   #41
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I'm in SF nearly weekly for negotiations (Barclays Capital associate) with Wells Fargo and my American counterparts are very clear that California represents the very best of America. Very "tall poppy" attitude.

It has come up many times that they feel like it would be in their best interest to secede from the US and become a separate country.

So maybe toss in an extra billion for the cost of secession and a few rashers of bacon and be rid of them.
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Old 10-04-2008, 09:19 AM   #42
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California represents both the very best and the very worst of America.


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Originally Posted by ST in London View Post
I'm in SF nearly weekly for negotiations (Barclays Capital associate) with Wells Fargo and my American counterparts are very clear that California represents the very best of America. Very "tall poppy" attitude.

It has come up many times that they feel like it would be in their best interest to secede from the US and become a separate country.

So maybe toss in an extra billion for the cost of secession and a few rashers of bacon and be rid of them.
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Old 10-04-2008, 09:43 AM   #43
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California represents both the very best and the very worst of America.
Let me guess. Best coastline and weather? Worst people?

I always laugh at my own jokes and humor. Just so someone gets a laugh out of it.
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Old 10-04-2008, 10:02 AM   #44
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Originally Posted by . . . Yrs to Go View Post
Money isn't free. If the state sits on piles of cash to manage its day to day expenses someone is paying for that cash. That person is you.

So what is your cost of funds? 18% on a credit card? 9%+ on a home equity loan? Meanwhile the state typically borrows at 2%. So do you think it is more efficient for the state to borrow from the capital markets at 2% or from its tax payers at 9%+?
I won't repeat everything that Firedreamer and SamClem have said. I'll just say that they make a lot of sense to me.

On this 18% and 9% vs. 2% point, you are assuming that all taxpayers are net debtors. That's not true. Plenty of people have more money invested than borrowed. If I'm in the second group, it's more efficient for me to pay the taxes in advance of the spending, rather than in arrears. Why should the gov't run its operations to favor taxpayers who are net debtors instead of taxpayers who are net lenders?
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Old 10-04-2008, 11:02 AM   #45
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I won't repeat everything that Firedreamer and SamClem have said. I'll just say that they make a lot of sense to me.

On this 18% and 9% vs. 2% point, you are assuming that all taxpayers are net debtors. That's not true. Plenty of people have more money invested than borrowed. If I'm in the second group, it's more efficient for me to pay the taxes in advance of the spending, rather than in arrears. Why should the gov't run its operations to favor taxpayers who are net debtors instead of taxpayers who are net lenders?
Exellent point. This country has become a debtor nation. From the little guy making the minimum payment on his maxed out credit card to big government that continues to spend and borrow more than it takes in. This country can not last for long at this pace.
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Old 10-04-2008, 11:47 AM   #46
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I take an annual road trip through Nevada and Utah every year. I am often amazed at the unsolicited things people decide to share with me, a perfect stranger.

A fellow customer in a buffet line: "Hi, where you from?
Me: "San Francisco Bay Area."
Him: "Humph. California, land of fruits and nuts."
Me: "I do hope the weather holds up until we get to Reno."

Waiter in Nevada town: "Where you-all from?"
Me: "Northern California"
Him: "I hate California -- too many damned (insert homosexual slur here)."
Me: "You don't say. When's the last time you visited our fair state?"
Him: "Hell, I've never been there, and I never plan to go."
Me: "I'll have the eggs over medium, please."

Me: "Hi, would you fill her up, please?"
Oregon gas station attendant: "You've got California plates there, I see"
Me: "Why yes. I live near San Francisco."
Attendant: "Hope you're not planning on staying. We've got too much of you Californicators up here already."
Me: "Would you do me a favor and check the oil while you're at it?"

Person A on this board: "Lots of far poorer states do just fine. I have no tear for the Golden State."
Person B: "California is the best and worst of America."
Person B: "Let me guess. Best weather, worst people."

Why thank you all, so very, very much.

As it happens, I'll be in London later this month on business. I hope the good manners my parents taught me stand me in good stead if I'm tempted to verbally molest innocent natives going about their daily business.

Before I go, a shout-out to you, ...Yrs to Go. I thought you summed up the state's loan issue very well, and I thank you. But I suspect that the desire to see us "Californicators" get our comuppance (something we also saw expressed during the energy crisis a few years back), works against your getting the message through to a lot of folks.
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Old 10-04-2008, 12:33 PM   #47
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Originally Posted by Caroline View Post
I take an annual road trip through Nevada and Utah every year. I am often amazed at the unsolicited things people decide to share with me, a perfect stranger.

A fellow customer in a buffet line: "Hi, where you from?
Me: "San Francisco Bay Area."
Him: "Humph. California, land of fruits and nuts."
Me: "I do hope the weather holds up until we get to Reno."

Waiter in Nevada town: "Where you-all from?"
Me: "Northern California"
Him: "I hate California -- too many damned (insert homosexual slur here)."
Me: "You don't say. When's the last time you visited our fair state?"
Him: "Hell, I've never been there, and I never plan to go."
Me: "I'll have the eggs over medium, please."

Me: "Hi, would you fill her up, please?"
Oregon gas station attendant: "You've got California plates there, I see"
Me: "Why yes. I live near San Francisco."
Attendant: "Hope you're not planning on staying. We've got too much of you Californicators up here already."
Me: "Would you do me a favor and check the oil while you're at it?"

Person A on this board: "Lots of far poorer states do just fine. I have no tear for the Golden State."
Person B: "California is the best and worst of America."
Person B: "Let me guess. Best weather, worst people."

Why thank you all, so very, very much.

As it happens, I'll be in London later this month on business. I hope the good manners my parents taught me stand me in good stead if I'm tempted to verbally molest innocent natives going about their daily business.

Before I go, a shout-out to you, ...Yrs to Go. I thought you summed up the state's loan issue very well, and I thank you. But I suspect that the desire to see us "Californicators" get our comuppance (something we also saw expressed during the energy crisis a few years back), works against your getting the message through to a lot of folks.

Wow, that was quite a painting of the people of Utah and Nevada. How rough you must feel having to travel there. I've heard those same sentiments many times during social hours after meetings in SF. Seems Californians have little use for those states.

But London will be fine whether you come or not. Just remember not to mention our drafty old hotels, the small lifts and other ancient things that don't meet California standards (anymore than your neighboring states don't have the same intelligentsia as your state). Something my Californian colleagues have only recently learned. Or next thing you know, we'll have the heathens from Nevada and Utah descending upon us looking for kindred spirits, one notch down.
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Old 10-04-2008, 12:38 PM   #48
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Quote:
Originally Posted by Caroline View Post
A fellow customer in a buffet line: "Hi, where you from?
Me: "San Francisco Bay Area."
Him: "Humph. California, land of fruits and nuts."
Me: "I do hope the weather holds up until we get to Reno."

Waiter in Nevada town: "Where you-all from?"
Me: "Northern California"
Him: "I hate California -- too many damned (insert homosexual slur here)."
Me: "You don't say. When's the last time you visited our fair state?"
Him: "Hell, I've never been there, and I never plan to go."
Me: "I'll have the eggs over medium, please."

Me: "Hi, would you fill her up, please?"
Oregon gas station attendant: "You've got California plates there, I see"
Me: "Why yes. I live near San Francisco."
Attendant: "Hope you're not planning on staying. We've got too much of you Californicators up here already."
Me: "Would you do me a favor and check the oil while you're at it?"
Unfortunately Caroline, I get in the same kind of situations when, as a resident of Alabama, I travel to CA. A few years ago we were invited to a wannabe-posh wedding in San Diego and somewhere along the line somebody thought that it would be great fun for everybody to introduce themselves (name and where they came from) during the rehearsal dinner. Hi I am Cindy from San Fran, clap clap, hi I am Steve from Orange county, clap clap, hi I am Wendy from Santa Barbara, clap clap, hi I am FIREdreamer from Alabama, chuckle chuckle... I was pretty much ignored for the rest of the evening. Never mind the fact I was the only one in the room with a Ph.D., never mind the fact that I was probably one of the wealthiest guests there, never mind the fact that I grew up in one of the most cosmopolitan cities in the world, I was instantly reduced to an unworthy red neck because I have Alabama license plates on my car.

As a European, I have only been insulted twice in the US for being a foreigner. I have lived in the South for 12 years and believe it or not, it took traveling to liberal temples like San Francisco and New York to hear myself being called names because of the color of my passport.
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Old 10-04-2008, 12:47 PM   #49
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It may be worthwhile to point out that once you get outside the metropolitan areas of SF, LA and SD, most californians are fairly conservative, lower to middle class, and in many instances very red neckish.
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Old 10-04-2008, 01:07 PM   #50
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It may be worthwhile to point out that once you get outside the metropolitan areas of SF, LA and SD, most californians are fairly conservative, lower to middle class, and in many instances very red neckish.
I would go one step further. Even in those large cities, the red neck shines brightly. Most Californians in, even, the Tinsel towns trace to farm belt America and Mexico. Not exactly Harvard or Yale, let alone Eton or Oxford. Just seems that once you settle in SF, LA and SD, you hide the former identity and become posh. Ultra, whatever. See it here in London as well.

I do sense affectation and smugness when chatting with colleagues in SF, not nearly as much in NYC and really just nice charm when in Charlotte.

It does play a part in why we here in London are going, oh my, the cur's fleas are showing.

Firedreamer, that is par for my conversations in SF. Mention the South and it's a good old besmirching party on.
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Old 10-04-2008, 01:58 PM   #51
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You may have noticed how tax exempt mutual funds are paying really, really, high yields? (I know there was a thread here on the topic). Do you think they are just being generous? Sorry, but no. They are struggling to raise short-term liquidity like everyone else. If the states can't refinance their short-term maturities they will default . . . welcome to the credit crisis.

But don't worry, the market will sort it all out.
Okay, now you have me worried. We moved our CA muni bond funds into CA tax-exempt MM a couple of weeks ago right as the muni NAV prices started to fall off the table. Are you saying if CA defaults, goodbye CA tax-exempt MM fund?
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Old 10-04-2008, 02:46 PM   #52
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On this 18% and 9% vs. 2% point, you are assuming that all taxpayers are net debtors. That's not true. Plenty of people have more money invested than borrowed.
So is your expected return from your invested portfolio more or less than 2%?

If it is more than 2%, then you are destroying value by taking money out of higher returning assets and letting the government sit on it to avoid paying 2% finance charges.

Listen, I'm not saying any of this is right or wrong. All I'm saying is that this is happening.
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Old 10-04-2008, 02:56 PM   #53
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I would go one step further. Even in those large cities, the red neck shines brightly.
Yeah, I know. Thing is most people from outside of California visit one of the major cities and think everyone here lives in a million dollar house, drives a porsche, spends afternoons at the beach and votes democrat. Its all they get to see.

Most of the state is rural and agricultural and hotter than heck in the summer, many parts are mountainous and heaped with snow all winter.

And the people are as varied as anywhere else you'd care to visit. For better and for worse.
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Old 10-04-2008, 03:02 PM   #54
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Okay, now you have me worried. We moved our CA muni bond funds into CA tax-exempt MM a couple of weeks ago right as the muni NAV prices started to fall off the table. Are you saying if CA defaults, goodbye CA tax-exempt MM fund?
It's not my intention to throw gasoline on the fire (although I admit to doing a bit of that in my futile attempts to persuade the 'let them all go bankrupt' crowd that massive, cascading, bankruptcies may not be the best solution).

The first thing I'd do is check to see if your MM fund has signed up for the federal insurance. If it has, I'd probably sit back and enjoy the high returns (yup, this is called 'moral hazard'). If not, I'd have to think a little harder.

My fear is that everyone will try to hit the exits of these funds at the same time (and I own Vanguard's NJ MM fund which, judging by the yield, is having some of the same issues). Even if the borrower never defaults, a run on the money fund could cause problems as it tries to liquidate the portfolio to meet redemptions.
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Old 10-04-2008, 03:16 PM   #55
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If it helps, I wouldn't put any of my money into any of the muni MM funds or any short muni bond funds right now.

At best you'll pick up a few dollars worth of extra interest for a month, maybe two. At worst either people will all yank their money the minute the yields drop or the municipalities will be unable to make good on the debt.

Either way something bad is going to happen. To the best of my knowledge, Vanguard hasnt signed up for any MM insurance, there isnt any on the bond funds, and any money you moved since the insurance was put in place wouldnt be covered anyhow. But maybe they'll reach into their pockets and make it right if theres a problem on the MM funds. If they can.
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Old 10-04-2008, 03:30 PM   #56
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California gets only 80 cents from every dollar of federal tax it sends off, where states like Mississippi, New Mexico, and Alabama get twice that or more. More than 10% of the country's population lives in California, of which 45% are Republican. It's GDP makes it the 9th largest economy in the world. Some of the finest research institutes and universities in the world are in California.

Meanwhile I often experience a hostile, looked down upon attitude when traveling out of the state. If there is a little backlash from people who are happy to have their lifestyle subsidized by our tax dollars yet treat us like the dead weight dragging from the back bumper of "their" wonderful country, I'm not surprised.

As for the Brit, your song sounds familiar. How do we always attract a few commonwealth residents who like to bash America?

So how about instead of loaning California any money we have the other states simply pay us back the 20 cents on the dollar we've been subsidizing for the last half century. We won't charge interest! Thought so.
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Old 10-04-2008, 03:52 PM   #57
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California gets only 80 cents from every dollar of federal tax it sends off, where states like Mississippi, New Mexico, and Alabama get twice that or more. More than 10% of the country's population lives in California, of which 45% are Republican. It's GDP makes it the 9th largest economy in the world. Some of the finest research institutes and universities in the world are in California.

Meanwhile I often experience a hostile, looked down upon attitude when traveling out of the state. If there is a little backlash from people who are happy to have their lifestyle subsidized by our tax dollars yet treat us like the dead weight dragging from the back bumper of "their" wonderful country, I'm not surprised.

As for the Brit, your song sounds familiar. How do we always attract a few commonwealth residents who like to bash America?

So how about instead of loaning California any money we have the other states simply pay us back the 20 cents on the dollar we've been subsidizing for the last half century. We won't charge interest! Thought so.
Minnesota only gets 77 cents back. Calif isn't subsidizing our lifestyle.
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Old 10-04-2008, 04:05 PM   #58
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Minnesota only gets 77 cents back. Calif isn't subsidizing our lifestyle.
And you should try being a Minnesotan visiting Wisconsin or Iowa (or vice versa for that matter).
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Old 10-04-2008, 04:19 PM   #59
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Minnesota only gets 77 cents back. Calif isn't subsidizing our lifestyle.

And Minnesota citizens have always been polite, too! I bet there is some sort of correlation between amount of federal welfare a state gets and how loudly it cries to be free of the tyranny.
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Old 10-04-2008, 05:01 PM   #60
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Connecticut only gets back $0.69 for each dollar of federal taxes paid (as of 2005). This website shows the figures for each state from 1981 - 2005

The Tax Foundation - Federal Taxes Paid vs. Federal Spending Received by State, 1981-2005

On a quick run through the data, I note that the states that are relative "takers" are the politically red states, while the "giver" states are blue. Interesting.
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