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[[wysiwyg_imageupload:235:]]The WSJ is reporting that it is not so easy for municipalities to file bankruptcy, due to their need to have continued access to raise capital.  We ask what other alternative to state and municpal governments have?  When analyzing the ballance sheets of states and municipalities, a novice can see that current liabiblies drastically out number tax receipts.  Not only has current revenue collapsed, but when one considers future promises to government pensions, it resembles a house of cards. The only other alternative that we see is a federal bailout of epic proportions - and this very well could happen.  In fact, we fully expect it to happen.

From the article:

We reported almost a month ago that Robert Rizzo, the city manager of Bell California, was being paid millions to push paper in the city of Bell California.  It turns out that he was on the take and the city is prepared to announce criminal charges.  It's about FREAKING TIME.  He should be happy that he was not tarred and feathered.  The LA Times reports:

[[wysiwyg_imageupload:157:]]The Great Marc Faber on the markets:

Current views are extreme. Marc sees the markets in a trading range. It could go down down Oct-Nov, then rally by end of year.

Wouldn't bet that S&P support at 1040 won't be broken, but he doesn't think we'll get below March 2009 lows.

Markets may not be happy with additional stimulus.

Geopolitical concerns may lead to correction.

Advises investment in physical gold.

(Click the "read more" link below to watch the video.)

by Justice Litle on Tue, 7 Sep 2010

Blue chip companies are borrowing from investors at insanely low interest rates. This is not a good sign.

It's back again, and the drumbeats are growing louder... the dreaded "D" word. Not doom or death or destruction, but deflation.

Investors by all rights should be scared silly by the prospect of deflation, based on what it did to Japan. During Japan's long march into the abyss from 1990 onward, the Nikkei lost more than 75% of its value... and still has not gained it back. Japanese equities – and investors who held on for the ride – were absolutely destroyed.

by Kieran Osborne CFA on Wed, 8 Sep 2010

In an environment with historically low interest rates, fixed income investors have been pouring money into longer-duration securities, substituting 3 and 6 month T-Bills with 10-year Treasures or bond funds. To an extent, this should not be so surprising: the Federal Reserve’s (the Fed) extraordinary monetary policies have resulted in extremely low yields at the short end of the yield curve. Investors seeking yield have been forced out the yield curve or into increasingly risky investments in an attempt to gain higher investment returns. However, this is not a strategy without risks, both at the individual investor level and for the economy as a whole. Are the Fed’s monetary policies, combined with the government’s decision to issue increasing levels of longer duration debt, having the unintended consequence of stoking the fire for further financial stress?